When you get to the point that your finances are in such dire straits that you consider filing with the court to discharge your debts, you may be shocked to discover how expensive a bankruptcy attorney can be. What are your choices, if you want to file for Chapter 7 Bankruptcy, without spending thousands of dollars that you don't have on a lawyer?
Bankruptcy Attorneys are Expensive
An attorney that files bankruptcy papers with the court will typically charge a flat rate for a simple petition, based the average time spent on the typical case. The lawyer will consider information such as the number of papers that need to be filed with the court, the length of time to evaluate the case, the number of meetings with the client, the type of bankruptcy petition and the amount of property involved.
Although the vast majority of the work on a debt-discharge case is done by paralegals, the attorney's oversight causes the price tag for a lawyer-assisted bankruptcy to rise into the thousands. Since most consumers that are filing to dissolve their accrued debt do not have several thousand dollars lying around, the lawyers offer convenient monthly payment plans. Once the entire bill has been paid in advance, the petition is filed with the bankruptcy court.
Although an attorney is expensive, if the case involves any complications, such as property or other assets, it's a good idea to get some legal advice before filing. The good news is, once an attorney has been retained, they can protect you from your creditors, and debt collection agencies, even if it takes several months to pay the legal fees.
Bankrupt? Get Help from Paralegal Services
A paralegal service can provide debt help to consumers who want to save money and file chapter 7 without lawyers involved. This option is considerably less expensive than hiring a lawyer, but comes with some risks. Paralegal services are not allowed to practice law, or give legal advice, which can make things difficult, if you have trouble during the legal process.
What sort of help can a paralegal provide? Paralegals can provide all of the necessary papers for filing bankruptcy, and fill them in appropriately you, as well as filing the papers with the court. Taking advantage of these paralegal services works well for consumers with simple bankruptcy situations.
Filing Papers To Discharge Debts
Chapter 7 Bankruptcy petitions, when filed correctly, can preserve assets while discharging debts. If the bankruptcy is not filed correctly, the consumer runs the risk of losing assets and even remaining liable for existing debt. Although filing for bankruptcy does affect the credit rating, it is possible to fix the resulting low credit score, so don't feel like you have to avoid filing for chapter 7, just to avoid a credit rating disaster. Chapter 7 isn't for everyone, but if you choose to file, make sure you do it right, and get legal help if necessary.
This article is meant to be used for general information purposes only, and is not legal advice. Please see an attorney for information about your specific circumstances.
Source:
- Federal Trade Commission. Knee Deep in Debt. Accessed April, 2011.
- Larbalestrier, D., Spagnola, L. Paralegal Practice & Procedure: A Practical Guide for the Legal Assistant. Penguin. 2009.
Updated: April, 2011
Victoria Nicks - Victoria Nicks has a Master's Degree in IT, and extensive hands-on experience with various types of hardware and software.
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