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Average cost to file Chapter 7 Bankruptcy

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    Average cost to file Chapter 7 Bankruptcy

    I'm sure this is on the site somewhere, but I was having trouble locating it. My daughter is considering filing Chapter 7 Bankruptcy. She will have to save money, but we were wondering what an average amount would be for an atty, filing fees, court costs, etc. She wants to surrender her car because she can't afford the payments, but they threatened her with garnishment. If she makes a "downpayment" to an attorney and then pays something more from each paycheck, will that keep the garnishment away until she can get all the money together? Thanks for your help!
    Ch13 filed 1/13/11, 341 held 2/17/11, Confirmed 3/23/11
    1% to unsecured creditors
    25 down, 15 to go! Thanks to all for your help here on the Forum!

    #2
    My experience based on numerous consultations is that the cost runs $1100-$1600 for Chapter 7. Most attorneys will offer a free consultation to answer the specifica. Unfortunately I believe you have to file before the garnishments stop and most attorneys require full payment prior to filing.

    You could do Pro Se which will only be court cost which attorneys include in their price but I would not recommend it based on things I've read.

    Comment


      #3
      Originally posted by bsat873 View Post
      You could do Pro Se which will only be court cost which attorneys include in their price but I would not recommend it based on things I've read.
      Are you kidding? Unless you have a complicated case, by which I mean you own a home or business, have student loans which you are trying to discharge, are being sued for a claim of negligence, were involved in a recent divorce, or are over the median income for your district, filing pro-se is very easy and doable. If all you have is typical consumer debt such as credit cards, medical bills, car loans, etc, then I suggest skipping the attorney, buying the NOLO book "How to File for Chapter 7 Bankruptcy", and taking advantage of the resources in this forum.

      Once the decision to file for bankruptcy is made, I suggest stopping all payments on unsecured debts, stopping payments on vehicle(s) which will be surrendered, and spending down your non-exempt funds on living expenses and any other necessary items (food, healthcare, clothing, etc). Do not fear the car finance company's threats. It will take at least 2-3 months from the date that they actually repo the car (or you surrender it back to the lender) before they can even come after you with a lawsuit. Remember that in order to claim a deficiency balance, they have to actually sell the car at auction, then send a demand letter asking that you pay (or make payment arrangements) on the remaining balance. Then after a month or so, they might send the file to a law firm, which is probably going to send another demand letter before they file a lawsuit. Once that happens, you still have to be served.

      Even after the lawsuit is filed, the creditor still has to obtain a judgment in order to begin garnishing wages or bank accounts. If you do nothing, then 30 days after you were served, the creditor will file a motion for default judgment, and it will probably take another week or two for the judge to actually grant the judgment. If you decide to file an answer to the lawsuit, that will drag it out for a couple more months, thus buying you more time to prepare your bankruptcy documents and spend down any non-exempt funds.

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        #4
        Depends where you are. Here in NJ could easily be 2500 or more. One place we spoke to years ago wanted 3500. Easy to find out tho, a few phone calls should do it.

        Keep On Smilin'

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          #5
          Here in Texas, I paid about $2400.
          Chapter 7, above median, no asset. Discharged with no UST involvement.

          Comment


            #6
            Originally posted by bcohen View Post

            Are you kidding? Unless you have a complicated case, by which I mean you own a home or business, have student loans which you are trying to discharge, are being sued for a claim of negligence, were involved in a recent divorce, or are over the median income for your district, filing pro-se is very easy and doable. If all you have is typical consumer debt such as credit cards, medical bills, car loans, etc, then I suggest skipping the attorney, buying the NOLO book "How to File for Chapter 7 Bankruptcy", and taking advantage of the resources in this forum.
            Filing pro se should not be taken lightly no matter how simple a case you have. Yes, it is doable and many people are very capable of filing a pro se Chap 7 and getting through it easily. But, some people just don't have a mind for this kind of thing or the attention to detail needed to make sure they don't make a mistake. A small mistake on the petition or a innocent transaction within 2 years of filing that a debtor had no idea would be an issue can make a simple case not so simple anymore. Finding an attorney to help after you already filed is difficult. Before anybody decides to file pro se, they should learn everything they can about bankruptcy, consult with a couple of BK attorneys about their specific situation and become very confident that they can handle acting as their own attorney.
            LadyInTheRed is in the black!
            Filed Chap 13 April 2010. Discharged May 2015.
            $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

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