Low-Cost Bankruptcy
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Low-Cost Bankruptcy

For obvious reasons, many people interested in filing for bankruptcy are concerned about finding the lowest-cost option available. When making this decision, it's important to consider a variety of factors that contribute to a bankruptcy case's total cost.

For a free, no-obligation consultation with a bankruptcy lawyer about your potential case, simply fill out the below form and learn your options.

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The Cost of Bankruptcy: Chapter 7 Vs. Chapter 13

One of the most important decisions you'll have to make is whether to file under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. There's a slight difference in cost between the two, but that's only one of their differences. Here's a breakdown of the two most common types of personal bankruptcy.

  • Chapter 7 bankruptcy: Also known as "liquidation," this type of bankruptcy has a filing fee of $299, due to the U.S Bankruptcy Court. It works by offering filers a discharge of some or all of their unsecured debts. Chapter 7 bankruptcy cases tend to move quickly, and filers often get their debt discharge in as little as six months. Chapter 7 often works well for people who have few or no non-exempt assets, because any assets not deemed "exempt" under state or federal law can be liquidated (sold for cash) and the funds used to repay creditors.
  • Chapter 13 bankruptcy: Also known as "reorganization," this type of bankruptcy has a fee of $274 to file. It works by giving filers three to five years in which to catch up on their overdue debts while staying current on debts that accrue during that time. While it costs slightly less up front, Chapter 13 bankruptcy requires filers to make regular monthly payments for a period of several years, and so generally works better for filers who have a dependable, regular source of income.

In addition to the fees required by the court, you will also have to take a pre-filing credit counseling course, as well as a pre-discharge financial management course. If you hire an attorney, you will also have to pay those fees as well.

Everybody's case is different, and you may want to consult with a bankruptcy lawyer about which type of personal bankruptcy is most likely to offer you the financial relief you need.

The Bigger-Picture Cost of Bankruptcy

When you file for bankruptcy, though, it's important to remember that the initial price tag isn't the only factor to consider. Chapter 7 and Chapter 13 may have very different impacts on your life, so you may want to consider some potential side effects of each.

  • Keeping your "stuff": If you have significant assets (like a house, car, or valuable family heirlooms), you may be more likely to hang onto them in Chapter 13 bankruptcy than in Chapter 7.
  • Preventing foreclosure: If you're interested in halting or postponing the foreclosure of your home, Chapter 13 may work better for you because it lasts for several years, and so long as you are in compliance with the plan approved by the bankruptcy court, no creditors are permitted to take collection action against you. In the meantime, you may be able to catch up on your debts and keep current on your mortgage, or make alternate living arrangements.
  • Eliminating unsecured debt: If the bulk of your debt is unsecured and you don't have a steady income source (or don't make much money compared to your expenses), you may be better off filing for Chapter 7 bankruptcy, which will likely get you in and out of the court system more quickly.

The Costs and Benefits of Bankruptcy: Consult with a Lawyer for Free

If you have questions about which type of personal bankruptcy might fit your finances best, take advantage of this offer to consult with a bankruptcy attorney for free.

Free Case Evaluation

Tap to Call - (877) 250-8242

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