A year ago, John and Mary Baxter were a typical two-earner, middle class family. Then Mary's company downsized her, and six months later John's company moved to Mexico. They limped along for a while, living on unemployment and using up their savings. Nevertheless, when Mary got in a serious car accident and ended up in the hospital, it wiped out everything they had, and the bills started piling up. Now several months behind on all of their bills, the mortgage company has filed a foreclosure proceeding on their home, and the Baxter’s don't have the $1800 to pay the attorney that they spoke with about filing for bankruptcy protection.
Luckily, it is possible to file for a low cost bankruptcy now. It does take a little research and shopping around, but there are ways to get the relief that is needed when the situation is so desperate.
Low Cost Attorneys
Typically, filing for Chapter 7 bankruptcy will run about $450 in attorney’s fees, and people who file for Chapter 13 (generally suggested to preserve home ownership) the attorney’s fees will be around $750. If the case is complicated, the attorney’s fees can quickly escalate. Court filing fees will be additional expenses, though installment payment arrangements are possible in some cases.
A qualified attorney can successfully guide each client through the entire filing process, and answer any questions that might arise about the rules of bankruptcy proceedings. Given the current state of affairs, some attorneys will offer discounted fees or payment plans.
Assistance Programs
There are many legal aid societies and similar organizations around the country, and some are willing to assist with bankruptcy cases. Certain income criteria and other qualifications will often apply.
There are also many other attorneys willing to provide help “pro bono.” Making some inquiries with a local bar association should yield referrals to attorneys that might offer relief.
Going it Alone
Preparation is the most important aspect to successfully filing for bankruptcy under either of the bankruptcy codes. Forms must comply strictly with all of the court’s rules to ensure that all goes smoothly. Additionally, adequate financial documentation is required both before and during the court proceedings.
Many document preparation services available utilize the services of paralegals to draft all of the necessary paperwork for each bankruptcy filing. These BPP firms, or bankruptcy petition preparers, do not serve as attorneys on your behalf.
Another option is the use of one of the software programs that are now available. The forms are available for download online and will need completion by the debtors.
The benefits of using either a BPP firm or software program are the lowered costs, typically under $200 for either option. Then again, a drawback to both is the lack of professional legal advice. While consultations with paralegals who prepare bankruptcy documentation are available, they are prohibited by law from offering legal advice.
Some people have the background and knowledge to handle a bankruptcy filing with limited help, and others would be much better off enlisting the help of a qualified bankruptcy attorney.
