Bankruptcy

What Are Your Options To Pay Bankruptcy Fees?

The reason you are considering filing bankruptcy is probably because you are frustrated with your mounting debt problems and the deteriorating financial situation. But, even getting yourself officially declared as bankrupt is also a highly stressful process. There are a lot of things that you need to work on thoroughly much in advance; how you are going to pay bankruptcy fees is one of them. There are a couple of options available to you in this regard, which you must be well aware of. Though a major part of the fees is basic and must be paid upfront, there are also certain costs that can be waived or at least be negotiated.

Type Of Bankruptcy

There are several typos of bankruptcy, but the two most common ones are chapter 7 and chapter 13. You must have a thorough understanding of the type of bankruptcy you are filing for. The bankruptcy costs may vary depending upon which chapter you are filing your petition under.

Whether Or Not You Are Hiring A Lawyer

While you are determining how to pay bankruptcy fees, you will also have to consider whether you need a lawyer for your case or you want to handle things on your own. There is no legal obligation to have a lawyer to represent your case in the court. The bankruptcy laws give you the right to represent yourself. But, considering the very fact that bankruptcy laws are very complex and it is often almost impossible for people to handle such cases on their own unless they themselves are legal experts in this field of law. That is the reason why the role and importance of a bankruptcy attorney just cannot be ignored. But, if you are hiring one, you will also have to include the attorney’s fee in the overall bankruptcy cost.

Filing Fees And Credit Counselling Fees

Other fees that you will have to bear include petition filing fee and credit counselling fee. You must consider these two factors also while you are working on your options on how to pay bankruptcy fees. As per the new laws introduced in October 2005, it is now legally mandatory for all debtors to first go through a credit counselling session from a state-approved agency. The counsellor will do a thorough review of your debt and financial situation and then will recommend whether you should file your petition under chapter 7 or chapter 13. Besides that, there is also a certain amount of money that you are required to pay as bankruptcy filing fee, which may vary significantly depending upon the type of bankruptcy you are filing for.

Upfront Payment

In most cases, you will have to pay bankruptcy fees upfront. Even bankruptcy lawyers often ask for the payments in advance. However, some of them may allow you to pay the fees in several instalments throughout the process.

Contingency Fee

Some lawyers may even agree to work on a contingency fee basis. As per this type of fee agreement, the lawyer will charge the fee after they perform what they promise. But, this time, the amount of the fees is going to be much larger as compared to when you agree to pay upfront. Still, if you do not have enough money to pay the fees upfront, you can consider the option for contingency fee.

Pay Through Garnishment

Another option to pay bankruptcy fees is through wage garnishment. In this method, you will authorize the lawyers to deduct a certain amount of money as their fees directly from your salary account. Alternatively, your employer gets a court order to deduct a certain amount from your wages and transfer that payment to the bankruptcy trustee, who will eventually disburse the payment to your lawyer.

Though a payment plan can be worked out for lawyer’s fee, there is no option to work out a payment plan as such for bankruptcy filing fee. Still, if you cannot afford to pay bankruptcy fees, there are options to get that fee waived off, but here again, you will need the assistance of an experienced bankruptcy lawyer.


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Posted in Bankruptcy, Filing Bankruptcy | 1 Comment »

One Response to “What Are Your Options To Pay Bankruptcy Fees?”

  1. John says:

    Being bankrupt is really a very traumatic situation; the whole process is very complicated. Debt problem leads to bankruptcy but it is not the end of the problems, actually it is just the start of an era of problems. First of all, when you decide to file the bankruptcy, you have to study thoroughly under which type you want to file for it, either chapter 7 or chapter 13. The next step will be to arrange the fee, you do not have sufficient funds that’ why you are going to be bankrupt but you have to arrange the filing fee and credit counseling fee. It is compulsory to attend the credit counseling session that too from a state approved agency. Some where the session may prove to be beneficial for you. It is quite possible that you may find some alternatives of bankruptcy by going through their counseling session. The fee may be given to your lawyer after the work to be done. It may vary from person to person but you will have to pay bankruptcy fee in advance only. Bankruptcy laws allow you to represent your self without taking the help of any lawyer, if you are aware of all the legal proceedings, you may go ahead on your self.

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