Many American
families are too poor to file for bankruptcy, according to a recent article in CNNMoney. Hefty filing fees may be preventing
struggling consumers from taking the difficult, yet increasingly important,
step toward getting out from under their crushing debt. Recent research submitted to the National Bureau of Economic Research
shows that the average cost to file for Chapter 7 bankruptcy protection is more
than $1,500. Those of us working in Chicago bankruptcy law know that making the
decision to file for bankruptcy is never easy.
It can be difficult to admit you need help, but our attorneys are here
to answer your questions, as well as to assist you as you consider all of your
options.
Why is filing for
bankruptcy so expensive, potentially prohibitively so, for the people in the
most need? The answer is the cost of
filing for bankruptcy has risen significantly in recent years due to the 2005 Bankruptcy Abuse Prevention and
Consumer Protection Act. The law tacked
on extra requirements to the filing process, including additional paperwork and
consumer credit counseling and debtor education, many of which cost debtors.
The numerous fees involved in filing bankruptcy are making it
tougher for lower-income individuals to take advantage of Cook County bankruptcy. For example, it costs about $300 to file
bankruptcy paperwork in federal court.
In addition, there are fees for the mandatory pre-bankruptcy credit
counseling and a pre-discharge debtor education course, which cost about $85
altogether. The higher fees correspond
with the additional paperwork that is now necessary due to the changes in the
law. Bankruptcy cases can be
complicated, and the changes make it even more crucial to consult a competent
professional.
According
to CNN Money, the rising cost of
bankruptcy filing will cause between approximately 200,000 and 1 million
consumers to be unable to afford to file this year. The National Bureau of Economic Research
found that the bankruptcy rate has fallen slightly since the Bankruptcy Abuse Prevention
and Consumer Protection Act took effect, but the average income of bankruptcy
filers has increased. Thus, consumers
who are better off or middle class are more likely to be able to file, rather
than lower-income debtors who may need it the most.
The attorneys at the Emerson Law Firm frequently
handle Chapter 7 bankruptcy
proceedings. Chapter 7 bankruptcy is the
most common form of consumer bankruptcy.
It allows consumers to consolidate student loans, protect loan
co-signers, or eliminate credit card debt.
However, not all debt is dischargeable through bankruptcy, so it is
important to consult a professional before you file. For instance, student loan debt is not currently
dischargeable, though the issue is being hotly debated. There are also tax consequences related to
filing for bankruptcy, so those most be carefully considered as well. Our Oak Park bankruptcy lawyers
have handled many bankruptcy proceedings and know how to successfully navigate
the legal system. For example,
bankruptcy lawyers know you
can request to have the $300 court fee waived if you are filing for Chapter 7
bankruptcy. To be eligible, you must
meet certain income and financial requirements, however, so, again, it is
important to discuss your bankruptcy case with a qualified professional.
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