If there is too much debt piled up, the only option available might be to file for bankruptcy. Before filing for bankruptcy, it will be worthy to find out what could be an estimated cost and what would be some of the debts that you could get rid off by filing for bankruptcy versus by not filing. Most of the stats indicated below are availed from reader’s surveys. To know more statistical information and technical aspects of bankruptcy, log on to Recovery Law Group.
Keeping everything aside, the most difficult and common question to answer is how much would an attorney charge for a Chapter 7 bankruptcy? The question is difficult to address because there are so many factors leading to the attorney fees. Most readers also ask if the attorney is really essential. Well, as per 95% of the bankruptcy filers think attorney just eased the process of bankruptcy for them. A good number of people as per survey offered a flat fee of under $1,500 to their attorneys, while some found attorneys who charged $700 and $2,500 based on the complexity of their situation. It would not be a bad start to set aside $1,500 as an estimate for attorney fees.
Other Administrative costs
A filing fee of approximately $335 is levied for bankruptcy filers. This fee can be waived off under rare circumstances when the filer’s income is low or negligible. Apart from this, the filer is required to attend two financial counseling courses. An estimated cost for this would be about $60 per course. This inches the total cost for filing bankruptcy to about $450 and thereabouts.
What is the average release percentage for each debt?
It can be very enlightening to note the average debt release percentage based on the category of debt. This gives a clear hint if you should opt for Chapter 7 or not. If you possess debt which has the highest percentage, you should opt for Chapter 7 if not you need to reconsider your options.
Credit Card debt – As per stats in 98% of cases, such debt was fully discharged. While in 1% cases, the debt was partially released. There is a 1% chance that your credit card debt shall not be discharged. So, if your financial position is worst because of credit card debt, Chapter 7 is the best alternative to you.
Medical bills – Stats confirm a full discharge in 95% of the cases, a partial discharge in 4% cases and no discharge in 1% cases. Just like credit card debts, medical debts are debts which can be discharged almost fully in most cases. A similar trend could be associated with business debts, utility payment arrears, and phone bills.
Taxes – This is one of the debts which is usually not discharged or released. However, stats say in 35% cases, filers received a full discharge of tax debts. Also, 26% of filers got a partial waiver for the taxes. Overall, a total of 61% received some rebate in taxes due because of Chapter 7 bankruptcy filing.
Student loans – Student loans and taxes are some non-dischargeable debts. These debts are released only when ‘undue hardship’ is proven. This is a scenario when an individual will not be able to pay the debt in the present and in the near future due to very poor financial condition. Good 9% of cases received a complete discharge of student loans, while 6% of the filers received a partial discharge.
For releasing taxes debt and student loans, you will definitely need a very good attorney. It is not impossible, but it is very tough to get those loans released. A dial to 888-297-6203 might just help you find the right one.
Home mortgage – A Home mortgage is a common worry, unlike credit card and medical bills, only about 68% were able to retain their homes after Chapter 7 bankruptcy California. Most people cite losing their home after Chapter 7, this stat just emphasizes the same issue. However, under most circumstances, if you have paid most of your home equity or are current with your home mortgage, saving your home can be easy.
Automobile loan – The percentage for the automobile is slightly higher to 87% which is more than a relief. If you own a basic car which is not ultra-expensive or luxurious, it is possible to box it in the exempt asset category.
Time factor – Chapter 7 is probably the fastest when it comes to wrapping up debt and leading you into a fresh financial zone. Good 90% of people got the process completed in less than 6 months, with 53% filers able to wrap it in under 3 months. Only 10% of cases took over 6 months. This makes Chapter 7 a great option if you want to wrap up this ugly chapter of your life to the earliest.