If you’ve been considering bankruptcy for any amount of time you may been considering what kind of cost might be associated along with going this route. So in this article I am going to cover three cost you will have to pay when it comes to going bankrupt, the court cost, the bankruptcy attorney fees, and most importantly the emotional cost.
First you have the court cost. This is the fee the courts collect in order to file the discharge paper work. The fees depend also on the type of bankruptcy you are filing for.
Chapter 7 court fees run around $299 and Chapter 13 court fees will run around $274. These are the only real fees you need to pay for bankruptcy, however with most people we need a lawyer to file these papers correctly and that’s were the attorney fees for bankruptcy come in.
Bankruptcy Attorneys Fees
The typical bankruptcy attorney fee can range from as little as $1000 to $2000 depending on the state that you live in. For example, in Ohio the average bankruptcy attorney fees will be around $1400 and in California the typical fee will be around $2000. It all depends on the state you live in.
It also depends on what you exactly assign your bankruptcy attorney to do. For example you may not need your attorney to attend the section 341 meeting which is meeting where get together with your creditors and negotiate a payment plan. However some states will not allow you to do this but if you can it could cut some of the cost.
To know for sure what you attorney is charging make sure you get everything in writing before you sign on the dotted line.
The Emotional Cost
Finally, you have the emotional cost involved. This can actually be worse than the previous two fees combined. The emotional cost of bankruptcy can be staggering, in fact when I was working in financial service I came across a client who just started the bankruptcy process and seen first hand how it had emotinally hurt them.
When I showed up at their house I could tell how much stress it was putting on them. They had every credit card under the sun stacked full of debt, they had a couple of car loans, and a house that was mortgaged to the hilt.
This was causing a severe financial strain on them. They were no longer the happy couple they once were and were now selling their home, their cars, and even worse getting a divorce all because they failed to see the signs of financial stress soon enough.
The cost emotionally for this couple was ten times the average bankruptcy attorney fees and court cost. It was going to cost the break up of family. Is this all really worth it?