How Much Will Bankruptcy Cost You?
If you are currently overwhelmed by debts and other financial obligations, you may be considering bankruptcy. This makes sense since the intent of bankruptcy is to help you take care of your debts and other financial obligations while getting back on your feet financially. However, there is a cost to bankruptcy. Not only will you have to pay attorney fees, but there are other expenses, as well. Continue reading as we answer the complicated question “how much does bankruptcy cost?”.
Chapter 7 Bankruptcy Costs
Once you decide to pursue Chapter 7 bankruptcy, your path to freedom from debt is not clear. It will cost you $310 to file for bankruptcy. You may be allowed to pay the fee in installments if you can not pay it all at once. However, keep in mind that your relief from debt will end if you miss any of your fee installment payments.
Perhaps the more substantial cost comes in selling your property. Chapter 7 bankruptcy is also referred to as liquidation, meaning that your assets are sold to partially pay off your debts. You will not lose everything, though. Under Georgia law, you can keep some exempt property, which can include:
- Up to $5,000 for a vehicle
- Up to $21,500 for a home
- Up to $250 in disability benefits
- Any alimony or child support payments needed to care for dependents
- Any pensions
- Up to $500 in jewelry
- Up to $3,500 in livestock, crops, and various household goods
There are many other exemptions, of which your attorney can advise you. The values listed are your equity or the difference between the value and what you owe on the property. This increases what some are able to keep. Still, you will lose much of your property as part of the cost of your case.
Chapter 13 Bankruptcy Costs
Just as in a Chapter 7 bankruptcy, there is a fee to file Chapter 13 bankruptcy. The cost is slightly more, at $335 to file. If you cannot pay the fee all at once, you can create a payment plan, but again, missing any fee payments will end your debt relief.
Additionally, Chapter 13 bankruptcy requires that you repay some of your debts using whatever portion of your income is classified as disposable. This means that you will lose your disposable income for the duration of your bankruptcy, typically three to five years. You are allowed some reasonable expenses from your income, but the remainder will be paid to a court trustee who will divide the money amongst your creditors.
Although the costs of bankruptcy can be difficult, even painful, they are not without purpose. Once your bankruptcy is complete, you will be able to start over without the crushing weight of most debts. Those which remain, such as student loans, are often more manageable than the debts you have eliminated, such as credit cards. In other words, the costs of bankruptcy can allow you a fresh financial start afterward, rebuilding your credit and your wealth.
Lower Your Bankruptcy Cost With an Attorney
Contact the experienced attorneys at Cornwell Law Firm to determine if bankruptcy is your best option. If so, we will assist you in filing bankruptcy and determining the best way to pay the related costs. Call us today to schedule a consultation and start the process of getting back on your feet financially