Bankruptcy? Is it for me?

Question

How much does a chapter 7 bankruptcy generally cost for approximately $12,000 in debt? I know the factors depend on a bunch of things, including the lawyer and such, but anyone with experience or knowledge would be a HUGE help! Thank you so much!

Oh, let's just say that bc I went on disability (which sorry to say pays squat) I have not been able to make any credit card payments for close to 6 months now (either pay off credit cards or keep my car and have a place to live, you know?) I'm receiving letters of arbitration now saying a certain creditor is taking me to court (for my LOWEST credit card, too!!). I have the option to write them with reasoning... but am scared they are going to garnish my wages or something and then I'm really screwed... will lose my car, which will result in losing my job, etc etc and then it's back to square one. It's a downward spiral and I've exhausted all other options.... :(

Answer 1

You need to consult a bankruptcy attorney, pretty much everyone on here has given you bad advice (not completely wrong, but enough wrong information hat they will only confuse you).

If you are on disability, you will not have an issue with filing a chapter 7 where you do not repay any debts (except those where you want to keep the collateral, like your car). However, I am confused, are you on disability or working? Don't let anyone here fool you into thinking you'll have to repay debts. The majority of people still qualify for a chapter 7, it just requires more documentation and effort (as do all chapters of bankruptcy).

The going rate for a chapter 7 is anywhere from $500-$1300. But keep in mind, you can probably negotiate most of your debts. In your circumstance they should be willing to work with you, assuming you stop using any credit cards.

Answer 2

Are you on permanent disability or do you believe you will eventually return to work? If believe your financial situation will change, you may want to explore all your options.

If you are unable to work anything out with your creditors, you may want to talk to consumer credit counseling. Bankruptcy should be your last resort, but sometimes, depending on your circumstances, it's the only resort.

If you contact some attorneys in your area, you will get an idea of how much a Chapter 7 will cost you. Also, many of them have a free initial consultation. Because costs of different things vary in so many areas, start locally. Around here, I believe you can have an attorney file a Chapter 7 for you for less than $1000.

Answer 3

Bankruptcy is a Last, not a First Resort.
Why do you want a bankruptcy?
Good Reason: Is a Wage Garnishment Pending?
(Try to avoid that if you can.)
Bad Reason : "I want to wipe out all my debt."
The rules for Bankruptcy have changed.
You may not even be able to file a Chapter 7 bankruptcy, depending on factors like income. You may have to file a Chapter 13 bankruptcy, in which you pay part to all of your debt anyway.
To do a bankruptcy w/lawyer costs thousands of dollars. $2000-$4000 ish, depending on where you live.
If you could make & keep payment arrangements, you could avoid bankruptcy altogether.
But it's your call.

Answer 4

You are going to ruin your credit for years over $12K??!?!?!?!?! You're kidding right?

You know that new bankruptcy laws require you to still pay back much of the debt, right?

Call all of them and work out a payment plan and try to get your interest lowered or stopped.

Then, make the minimum payments on every one of them. On the lowest dollar value, put all your extra effort toward paying it off. Once it is paid off, then roll that extra money to the next largest balance. Continue this snowball until all your debts are paid off.

You probably need to cut your expenses back to the bare minimum. Get rid of cable, cell phones, internet, etc. Lower your electric bill, gas bill, water bill, etc. Don't eat at a restaurant until your debts are under control. Take a sandwich for lunch. Cancel the gym membership.

Try to increase your income by getting a second job. If you have a car with payments, get rid of it, and buy a good dependable used car for CASH.

Go to the library and get "The Total Money Makeover". Read it and follow it carefully.

Go check out Dave's website as well.
www.daveramsey.com

Answer 5

Have you tried communicating your issues to your creditors? I know it's scary to admit that you can't pay, but they often are willing to work with you if you just talk to them. Not paying and avoiding them isn't going to solve your problems. I understand that you can't make money appear out of no where and your immediate needs come first (e.g. house, food, car, etc.) Try calling them and explaining your situation first. Bankruptcy will cost you a lot of money and it will ruin your credit. All though your credit probably isn't that great if you haven't been making payments for several months.

Answer 6

I live in Wa and filed bankruptcy in June. The fee was $800 and it was a chapter 7 with about 60,000 in debt. Many lawyers offer a free consultation where you can find out if they think your situation qualifies for the bankruptcy and their cost and process.

Answer 7

The people who answered are wrong. It does not cost $2000 to file for bankruptcy. When my dad filed, it was $399 to file plus attorney fees. The whole thing including attorney fees was about $1000. You can file yourself without an attorney, although I recommend an attorney. With $12,000 in debt, you may not be able to file chapter 7. You should see an attorney. Most give free consultations.

Answer 8

If your debt is only $12k, then bankruptcy is not for you - it will cost $2k to process, and you ruin your credit report in the meantime.

Better to see if you can scrape up $4k, offer it to the creditor if it is paid in full - require that it be in writing, do NOT give anyone your bank account information, and promiose not to do this again.

Answer 9

Ok,,,how do you peeps with your LAME advice expect her to get a SECOND JOB when she is on DISABILATY in the FIRST place! ? DUH!!! Im on disability and i can barely raise my head up some mornings.......you people are not THINKING straight ! I dont know what disability she has, but I have seizures, slight MS, chronic daily almost MIGRAINES, and FIBROMYALGIA......
which is called the "invisible disease"
I have actually had a lady (i have handicap license plate i hardly ever use) beep her horn at me and say: " you arent parking there are you? i dont see a placard on your mirror" My little boy pointed to my license and my cane.
which i dont always use, but i had to that day , i was in SO much pain. you know, i dont even think that woman felt bad!! she just saw a young person with little kids and assumed we were parking illegal

So, please dont judge people

Good luck . sweets!! happy holiday!

and FIRST LADY is right! search your newspaper...it dont cost that much for an attorney! My brother and his X filed for 285.00 that was less than 5 years ago in the state of OHIO.