Image source: StartFreshToday.com
I recently read an article that predicted America is pulling out of the recession because the number of bankruptcy filings is down. But one may not be indicative of the other. Instead, academic research performed jointly by professors from Columbia University, University of Chicago and Washington University in St. Louis and presented to the National Bureau of Economic Research indicates that the trend in filing is not good news at all.
The study found that between 200,000 to one million consumers who are deeply in debt and would likely file for Chapter 7 bankruptcy if they could, simply cannot afford to do so. They found that once cash became available, filings spiked such as during tax refund season.
One of the study’s co-authors Jialan Wang said, “For lots of people, bankruptcy has been taken off the table as an option because of the severe fees involved." Fees for bankruptcy filings can cost more than $1,500 and, for people already in debt and struggling, this can be a serious obstacle to filing for Chapter 7 relief. Wang added, “It ends up being the relatively better off, or middle-class consumers who can actually afford to file, and the people with lower incomes can't afford to file.”
The fees have increased over recent years in part because the Bankruptcy Abuse Prevention and Consumer Protection Act made it more difficult to file bankruptcy and greatly increased the amount of paperwork attorneys have to prepare and file for their clients. Between 2005 and 2007, due to legislative changes, average attorney costs doubled.
If you are in a situation where your debts have grown so unmanageable that filing Chapter 7 bankruptcy is the best option for you, don’t let a lack of money hold you back from getting much needed financial relief. Instead, consider these three options to help you get the help you need affordably:
#1 Request a fee waiver for $300 court costs. If you are earning income of 150% or less than the federal poverty line, your attorney can file for a Chapter 7 filing fee waiver and the judge will likely grant the request. You can see the table below – your household size determines the income threshold for poverty line consideration for a fee waiver. This will decrease the cost of your case considerably.
Image source: FamiliesUSA.org
#2 Look for a pro bono attorney. It’s rare that you can get a pro bono attorney to take your case, but if you are receiving some kind of state assistance or are receiving child support through a county collections program, they may be able to refer you to some resources. It’s worth pursuing to see if you can get the help you need for little or no cost.
#3 Use a $0 down plan from a reputable attorney. A select few North Carolina bankruptcy attorneys offer no money down bankruptcy plans. By using a zero money down option, you can get immediate relief from your debt payments. This will then free you up financially so you can afford to pay your bankruptcy fees. Your budget will be back on track right away and you’ll be on the road back to financial peace of mind.
Dedicated to helping residents of North Carolina find the best solutions to their debt problems. Don’t waste another day worrying about your debt. Call +1-919-646-2654 today to schedule a free initial consultation to discuss your bankruptcy options.