Many people that have financial problems that might be considering filing bankruptcy try and avoid it because they think that hiring a bankruptcy attorney will be out of their budget. It's common to hear financially strapped individuals say, "I can't afford to file for bankruptcy." But in reality, they can't afford to not file. It is true that filing bankruptcy will cost about $2000 for the fees of a bankruptcy attorney in filing Chapter 7. Filing Chapter 13 bankruptcy is a completely different ballgame and will cost between $3000 and $5000 depending on how complicated the case is. The cost of filing bankruptcy has gone up substantially since the changes to the bankruptcy code that were implemented back in 2005. Now, it's twice as much paperwork required for a bankruptcy attorney to complete to file the bankruptcy petition. Twice as much bigger paperwork, converts into twice as much work for the attorney. Although it is much more work, the cost of hiring a bankruptcy attorney has really not risen that much.
For someone that thinks they can afford to file for bankruptcy, they need to take a serious look at how much they are spending on their monthly credit card payments. You see, if you are filing Chapter 7 bankruptcy there will be no need to make these payments again because they will be included in the bankruptcy discharge. The only bills that will need to be paid for are those of securrd debts, that are secured by the property and will be repossessed if they are not paid for. For someone that has a large amount of unsecured debt like credit cards, medical bills, payday loans and personal loans, a Chapter 7 bankruptcy wipe them completely out. If a person is paying $1500 a month, just to make the minimum payments and nothing is coming off the balance, it's time to consider filing bankruptcy.
Living buried under a mountain of bills is no fun and can be stressful for the individual and destroy family relationships. Most divorces are caused by financial problems that might be avoided if the couple would stick together and face the difficulties head on, even if it meant filing bankruptcy. A person can't even put a price on the removal of the stress that comes with severe debt.
So when you add it all up, no more debt collectors, the bankruptcy discharge to wipe out all unsecured debts and the removal of all the stress that comes with financial difficulties it seems like a no-brainer. Looking at it from a cost versus reward viewpoint, the average American has $16,000 in credit card debt. Filing Chapter 7 bankruptcy will wipe this out for a cost of approximately $2000 for a bankruptcy attorney, court filing fees, pre-bankruptcy credit counseling course and a post-bankruptcy financial management course, it is really a good deal. Comparing that to using debt settlement, a person in the same situation would have to pay 50% back or $8000, plus whatever fees to the debt settlement company for negotiating the deal. Comparing the two, I would say filing bankruptcy wins every time, except in the case when a person has only a small amount of unsecured debt.
The author is a professional that formed FilingBankruptcyPros.Com which provides information for debtors considering filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy and helps individuals stop foreclosure and eliminate their debt by putting them in touch with a local bankruptcy attorney.
