Cost to Declare Bankruptcy
Having a lack of general funds and declaring bankruptcy are very separate matters. Declaring bankruptcy is the actual legal process of confirming that you cannot pay back a debt or multiple debts to your creditors. It’s a bit ironic that the process of claiming you have no money would end up costing money but there are costs and fees involved with declaring bankruptcy such as filing fees and attorney fees. Those are the main aspects that are the largest chunk of the cost but there are other minor costs that will affect the cost of filing for bankruptcy.
Factors of Cost
There are many small fees involved with filing for bankruptcy but the largest factors of the price include, court costs, attorney fees, and filing fees.
The cost of an attorney will be the most substantial cost during the entire process of declaring bankruptcy. In this sort of situation, hiring an attorney is almost mandatory due to the confusing processes of the court proceedings and the invaluable knowledge they will provide you with. Unless you are willing to study the process of declaring bankruptcy and hassle with all the court terms, etc. it is well worth the attorney fees. Depending on the attorney you hire and the difficulty of your case, budget for anywhere between $1000 and $4000.
Court fees will be the next most expensive part of filing bankruptcy. Mostly depending on the state you’re located in, court costs will range from as little as $300 up to slightly over $1000. The filing fees are also extra on top of that and are generally around the $300 mark. All in all, filing for bankruptcy will end up costing anywhere from $1600 up to $5300.
When filing for an individual bankruptcy, the court often orders mandatory counseling classes. These are designed to teach money management and organization to avoid the same situation in the future. These classes typically don’t exceed $100. There are also smaller extra fees that get added on for anything from administrative fees to trustee charges. Budget for about $45 for these additional costs. By paying all these fees and costs, your debt will be discharged and you will be free of all debt that is covered by the current bankruptcy laws.
Ways to Save
Deciding not to hire a lawyer after much thought and consideration is a way to cut your costs by over 75%. It is still wise to consult with a lawyer before court and absorb as much information as possible before you represent yourself. This will not take as much time and therefore will be more affordable.
If you do decide to hire an attorney to represent you, consult with multiple attorneys to find the best one to fit your needs and budget. Hiring a less experienced attorney will save money and should still accomplish what you need one for.