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Managing the high cost of bankruptcy

Bankruptcy is designed to help people, who have been overwhelmed by debt, manage their financial burdens. In some cases, debtors can emerge from bankruptcy with a clean financial slate. Some people, however, may be unable to afford the cost of bankruptcy itself. The truth is, filing for bankruptcy can be pricy, and the cost may deter people from starting bankruptcy proceedings. In addition to the fees and costs of filing the bankruptcy paperwork with the court, there are often attorney’s fees involved. In some cases, these fees can amount to thousands of dollars. This leaves many people wondering how they can come up with this money when they have no money to pay their debts in the first place.

Debtors have several options when it comes to accumulating the money needed to file for bankruptcy. Depending on which chapter of bankruptcy you are planning to file, you may want to stop making payments on your credit cards. Since you are attempting to discharge the debt, you can take the money that you would use for the monthly payments and put it toward obtaining an attorney. Keep in mind that once you file for bankruptcy, an automatic stay will keep creditors from harassing you with constant calls and correspondence.

There are some attorneys that may help you by working out a payment plan. This allows you to pay your attorneys’ fees and bankruptcy filing costs in affordable monthly amounts over time. Although you are able to file for bankruptcy on your own, without the legal assistance of attorney, it may be better to go through the process with a professional in your corner. The bankruptcy process can be confusing, and having an experienced lawyer there to answer your questions and walk you through the process may prove to be vital.

Source: Nerdwallet, “How to Pay for Bankruptcy When You’re Broke,” Sean Pyles, Oct. 25, 2016.  

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