Those deep enough in debt to consider bankruptcy
generally don't have the cash on hand to easily fund the bankruptcy
filing necessary to get relief.
The most common way to accumulate
the cash to file bankruptcy is to stop making payments on
dischargeable debts, and save that money toward a bankruptcy
In the real world, it takes many weeks, if not months, for a
creditor who decides to sue you to actually get a judgment that
permits the creditor to seize your property or your wages.
Since lawsuits cost money, most creditors rely on nasty letters
and harassing phone calls for a long while before suing.
So, you have time to save money
to pay for a bankruptcy solution.
Funding Chapter 13
In contrast to Chapter 7, Chapter
13 attorney's fees can be financed, as it were! Usually debtors
pay a portion of the attorneys fees and all of the filing fee
($194) before filing. The balance of the fees are paid from the
monthly payments that the debtor makes to the trustee by the
trustee to the attorney.
What does it cost?
Attorneys fees vary from
community to community and from the simple situation to the
complex. Although it may seem painful to pay money for legal
advice to go bankrupt, the more assets you have or the more
questions there are about the discharge of your debts, the more
important it becomes to have a lawyer, as opposed to a paralegal
or doing it yourself. When you represent yourself, you may be
betting your house that you know what you are doing in a
The court's filing fees are
Chapter 7 $209
Chapter 13 $194