It comes as a surprise to many people that filing for bankruptcy is not free.
How can that be? If someone is struggling financially how can he or she afford to pay to erase debt?
The truth is, many people assume they cannot afford to file for bankruptcy so they don’t take the next step. They allow their financial situation to worsen and they put their assets at risk. And if they do file, they opt for a so-called free or low-cost option that ends up costing them more in the long-run than their other options.
The first thing you need to understand is that filing for bankruptcy is a serious step in improving your financial situation and you should be as smart about it as possible. It is best to work with a professional, experienced bankruptcy attorney.
So what should you do if you don’t think bankruptcy is affordable but you know it is the best option for you?
First, it’s important to understand the different types of bankruptcy available. It’s cheaper to file for Chapter 7 then it is Chapter 13 because you won’t be committing to a repayment plan. In Chapter 13, you’ll be repaying all or a portion of your debt, which means it’s going to cost you more.
To file for Chapter 7, you must first take a means test and qualify. Not everyone is eligible for their preferred type of bankruptcy, check out this information from Credit Karma.
Feel free to take the free Chapter 7 calculator below if you want to estimate whether you pass the means test and qualify for a Chapter 7 bankruptcy.
Next, you’ll want to understand how the automatic stay works. Chances are if you are dealing with debt you are getting calls from debt collectors on a regular basis. Most people get several calls throughout the day, in addition to other demands.
And if you’re like most people, you pay what you can when you’re able to scrape together a bit of money. You might not be able to pay a debt in full, but creditors will pressure you to send them what you have – so out goes the occasional $50 to $100 you have at the end of the month to the most demanding creditor.
The automatic stay stops this and makes it so creditors are legally restricted from contacting you. This means you won’t feel pressure to pay that little bit of extra money and you’ll be able to save it and use it toward the cost of filing for bankruptcy.
Your final option for dealing with the cost of filing for bankruptcy is to speak to a bankruptcy attorney about your situation. Some attorneys are willing to work with you regarding the cost of filing. You’ll still need to pay the entire fee for filing with the court, but you might be able to work out a payment arrangement with your attorney.
The important thing is to explore your options and find out what you can do to make bankruptcy work for you.
For more information or to schedule a time to discuss your financial situation with an experienced bankruptcy attorney, contact the Bankruptcy Law Office of Robert M. Geller at 813-254-5696 to discuss your situation or schedule a bankruptcy lawyer consultation appointment online today.
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