Bankruptcy: Hidden Costs

The price of choosing bankruptcy is something you need to study prior to deciding if it's the path out of your financially troubling situation. Since you're already out of money, you don't want to end up in a position that will put even deeper into debt. It doesn't hurt to be educated on the cost of bankruptcy regardless of your choice to use it or not. The price differs from one region to another. Additionally, since it can be challenging to go through a bankruptcy process without a help of your lawyer, you have to take lawyer's fees into account.

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After legal proceedings begin, the process may take months and even years to conclude. This means that there are a wide range of costs to keep in mind. When you file for bankruptcy your not in the clear yet. There are laws in place that mandate filers undergo a financial "means test". This informs the court as to whether or not they are financially able to repay the debt. If they have financial means, they will be forced to repay all reasonable debt under an organized system as mandated by the court. It is also required that individuals to attend credit counseling as they begin to file for bankruptcy. This has an associated cost of about $70 dollars. There are numerous filing fees that can be involved depending on what category of bankruptcy that you have chosen to file. The price of filing is at least $200 dollars. Lawyers' fees vary depending on the information they need to collect and present in court. Depending on the legal business you are doing business with, you may be charges a flat fee or a sliding scale rate. The price on average in above $500 dollars.