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Posts Tagged ‘the true cost of bankruptcy’

What most individuals do not know about bankruptcy is the cost involved in going through it. Imagine a debtor, who is already having difficulty paying his debts, decides to declare bankruptcy without knowing how much bankruptcy costs . Basic bankruptcy information that a debtor must first learn when considering filing for bankruptcy is the cost of this procedure.

According to the Administrative Office of the US Courts, bankruptcy filing fees are as follows:

• Chapter 7 – $299
• Chapter 13 – $274
• Chapter 11 – $1,039

The bankruptcy costs above do not include credit counseling fees (which is required before a debtor file for bankruptcy), court fees, amendment fees and lawyer’s fees. The most significant aspect of this process is what bankruptcy can cost a debtor in long term scenario. Bankruptcy leaves a mark on a debtor’s credit rating making it hard to get future loans. If loans are available, it usually carries high interest rates. This is the reality that bankruptcy costs to a debtor life.

It is very important to take note of this bankruptcy information as a guide what to expect when filing for bankruptcy. If not for this reason alone, it is recommended to avoid bankruptcy as much as possible.