Today it is not uncommon for a family to be facing an enormous amount of pressure created by consumer debt. There are millions more Americans out of work today than there were five years ago and a society that was already leveraged to the hilt with credit card has found it more and more difficult to stay afloat financially. For these reasons more and more people are considering filing bankruptcy in order to escape the mountains of debt that they find themselves under. But, before any person should seriously considering declaring bankruptcy it is imperative that they spend some time doing some substantial research and meeting with a bankruptcy attorney.

There are many questions one need ask themselves: What are the pros and cons of bankruptcy? What are the consequences of declaring bankruptcy? How much does bankruptcy cost? It is this last question that I would like to focus on today.

How much does bankruptcy cost?

When considering the cost of bankruptcy there are a number of factors that must be considered. There are the hard costs of filing bankruptcy itself, and then there will be many more costs that the person will incur for years after their debts are discharged. Let's look at these costs of bankruptcy one by one.

The first cost of bankruptcy is simply what the procedure costs to complete. There are two substantial costs here to keep in mind. The first are the filing fees that are paid to the state. Long ago the administrative fees to file bankruptcy were immaterial. You could submit the paperwork for a few dollars. This is not the case anymore. Today bankruptcy filing fees run in the hundreds of dollars. The other direct cost is that of a qualified bankruptcy attorney. A bankruptcy lawyer is not required to complete the bankruptcy process but, unless you are very familiar with bankruptcy law, it is highly recommended. Bankruptcy is a complex legal transaction and you will need someone experienced in the process to make certain that everything runs smoothly. Bankruptcy attorney costs vary but it is safe to assume that you should budget $500 to $3000 for this expense of declaring bankruptcy.

Thus far you may be thinking the answer to the question, "How much does bankruptcy cost?" is actually, "Not that much." But do not be so quick to rush to judgment. The indirect costs of declaring are substantial and they will effect your ability to borrow money for years afterward. Bankruptcy will remain on your financial record for seven to ten years depending upon the chapter that you have filed under. During this time any loans that you may need for purchases such a mortgage will be significantly more expensive. Car loans after bankruptcy can be quite costly as well. In fact for the first 2 years after discharge you may find it difficult to get any financing at reasonable terms.

Other areas where having a bankruptcy on your record can hurt you include: apartment applications, job applications, leasing applications and insurance premiums.

Bankruptcy actually carries fairly substantial costs. How much does bankruptcy cost? It can end up being tens of thousands of dollars over the ensuing seven to ten years. For this reason, it is very important that you thoroughly research if bankruptcy is right for you before proceeding. In fact, it is advisable that you arrange to meet with a qualified bankruptcy attorney to discuss the specifics of your case. When a bankruptcy lawyer looks at the actual particulars of who and how much you owe, you can get a much better idea is bankruptcy is appropriate in your circumstance. The good news is that most bankruptcy attorneys offer free consultations to give their prospective clients more information and to help them decide how to proceed. Your next step should be to find an experienced bankruptcy lawyer in your area.

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