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I'm Broke, Can I Really Afford A Bankruptcy Attorney?

Posted By admin || 17-Dec-2009

Bankrupt businessman

Many debtors considering bankruptcy hesitate about hiring a qualified bankruptcy attorney because they fear they can't afford it.  The honest answer is that most debtors can't afford to NOT hire a bankruptcy attorney due to the high risk nature of taking creditors through the bankruptcy process. In other words it is high risk to take on creditors without an experience bankruptcy attorney you can rely on.  Let's take a look at some of the things that determine the cost of hiring a bankruptcy attorney:

  1. The complexity of your bankruptcy case.  If you're Bill Gates or Donald Trump, your finances may be quite complex and therefore a bankruptcy filing would cost considerably more than the bankruptcy filing for an "average Joe." However, if an average Joe or Jane has complex finances which require more time and expertise in a bankruptcy attorney that could increase the cost.  For example, if a debtor owns several rental properties, cars, investments and millions of dollars in debt, that might be a little more complex than another debtor who only owes $80,000 and earns $20,000 a year.
  2. The amount of time the bankruptcy attorney will be required to devote to the case. If you bankruptcy case is more complex, involving a multitude of debts it will require more time and will cost more.
  3. Whether you are filing a Chapter 7 or Chapter 13 bankruptcy. Chapter 13 bankruptcy typically costs more because it can last from 3 to 5 years and is more complex than a Chapter 7 bankruptcy. However, most debtors end up filing Chapter 7 bankruptcy, unless they are a high income debtor who has not passed the "means test."
  4. The amount of assets involved in the case. As we mentioned in point "#1" if you have several pieces of real estate, investments etc., your bankruptcy case is likely to cost more than the bankruptcy of a debtor with less assets.

The bottom line is that a bankruptcy filing with $1 million in assets and $2 million in debts will not cost the same as a bankruptcy with $30,000 in assets and $100,000 in debts.  It is only after a bankruptcy attorney has examined the details and requirements of the bankruptcy case can he/she determine the actual cost of filing bankruptcy.  Please note that even once that cost is determined, there are many payment options available for both Chapter 13 and Chapter 7 bankruptcy.

Categories: Bankruptcy
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