If you are thinking about filing bankruptcy, you are likely having serious financial problems. Eventually, you decide that you decide to have a consultation with a consumer bankruptcy attorney. During your consultation, you and the bankruptcy lawyer discuss the positives and negatives of filing bankruptcy and decide that you will be filing either Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. Then you ask the final question, how much will it cost me to file my bankruptcy case?
The attorney will tell you about his attorney’s fee and disbursements for filing fees, credit counselling and debtor education. Then you are likely to ask the following question: where can I get the money and when do I have to pay it?
Initially, let's talk about where that money can come from.
If you are filing bankruptcy under either Chapter of the Bankruptcy Code, you are generally advised to stop making any payments on unsecured debt, such as credit cards, bank loans, past-due medical bills, etc. Debtors are often advised to continue making payments for any asset that they are keeping, such as a car, house, pension loans, rent, etc. As a result, this is likely to improve their cash flow by freeing up the money that was being paid to the unsecured creditors.
If you are not working or already stopped all payments to creditors, you may need to ask relatives or friends for partial or full payment of the fees and disbursements required in a bankruptcy. While those loans would generally be dischargeable, they can be repaid after the bankruptcy.
Most bankruptcy lawyers offer payment plans. On average, a bankruptcy takes several weeks to prepare and the payments can be spread over that period. Alternatively, you can request additional time prior to the filing while the bankruptcy petition is being prepared.
Paying for bankruptcy is also different depending on whether you are filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy.
In Chapter 7 Bankruptcy, I cannot collect any money from the client against fees or disbursements after the filing of the bankruptcy. It is prohibited by the Bankruptcy Code. Therefore, all fees and disbursements must be paid prior to the filing of the petition.
In a Chapter 13 Bankruptcy, which results in a repayment plan, with payments of part or all of the debts paid through the bankruptcy court, a portion of the fee can be put into the Chapter 13 plan payment, making it easier on the client and expediting the filing of the bankruptcy petition.
If you are contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, New York, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.