The cost of bankruptcy is an aspect you need to investigate before you decide that this is the way for you to get out of your financial situation. Since you are already broke you do not want to end up in a situation where you will end up in more debt. It doesn’t hurt to know the cost of bankruptcy whether you choose to use it or not. The cost varies from one state to another. Besides, since it can be difficult to go through the bankruptcy process without the help of a lawyer, you have to put the lawyer’s fees into account.
After legal proceedings begin, they may take months to years to resolve. This means that there are more costs to consider. When you file for bankruptcy it doesn’t always mean that you are completely absolved from debts. There are laws in place that require individuals to undergo a “means test”. This reveals to the court whether they are financially capable of repaying the debt. If they can, they will do so under an organized system as directed by the court.
It is also a requirement for individuals to go for a credit counseling session once they file for bankruptcy. This is an extra cost in place which costs about $50 US dollars or more.
There are various filing fees that are to be paid depending on the type of bankruptcy claim that you are filing. The cost of filing is at the very least $200 US dollars. Lawyers’ fees vary according to the information they are required to collect and present to the court. Depending on the firm or the lawyer you are dealing with, there are those who charge a flat fee for bankruptcy services and there are those who charge according to the case. The cost is usually above $500 US dollars.
There are also hidden costs of aftereffects of bankruptcy to take into account, so it wise to think very carefully before you trot down the bankruptcy road.
Mercy Maranga writes content on Finance and Debt Management. Visit her site here for more information on Finance and how to effectively Manage your debts.
Bankruptcy
