Everyone Preparing To File For Bankruptcy Wants To Know How Much It Costs
This makes perfect sense as bankruptcy usually comes at a time when money is tight. We try to make the cost of filing a Chapter 13 or Chapter 7 the same for people at our law firm so that people do not think that they somehow are better off filing one over the other based on costs. A chapter 13 bankruptcy requires more work than a chapter 7, but we roll the bulk of our fees into the payment plan that will be approved by the court so we can keep the initial costs low.
So, the question of how much does it cost to file for bankruptcy sounds like a straightforward question, and I hear it on a daily basis. The answer as with almost every legal question is, It depends. Why does it depend? is usually the next question. As we go through this blog post the It depends should become evident.
Understanding The Different Kinds Of Bankruptcy: Debt Relief Through Chapter 7 13 Or 11
Choosing the right bankruptcy is important and every situation is unique. Our New Jersey bankruptcy lawyers can assess your individual situation and discuss which options will be best for you. There are three primary forms of bankruptcy that most individuals and businesses will pursue. Each chapter provides its own advantages.
Chapter 7 bankruptcy Also known as liquidation, Chapter 7 bankruptcy enables you to eliminate most of your unsecured debts while keeping most of your personal property through a system of exemption. Our bankruptcy attorneys will explain what debts are dischargeable, which assets can be protected and what is needed to qualify for Chapter 7 bankruptcy.
Chapter 13 bankruptcy This kind of bankruptcy is sometimes known as repayment. It offers relief to people who may not qualify for Chapter 7 bankruptcy because of their income. Chapter 13 bankruptcy allows people to get out of debt while making a series of affordable payments over a three- to five-year period. Chapter 13 enables people who are behind on mortgage or car payments to avoid foreclosure or repossession.
Chapter 11 bankruptcy Sometimes referred to as reorganization, Chapter 11 bankruptcy protects businesses from creditors while they restructure their debts and assemble a plan for business recovery. Our attorneys use sophisticated analysis of financial information to provide an accurate assessment of a businesss viability.
What Do Bankruptcy Attorneys Do
The primary goal of bankruptcy is to restructure and manage a personâs overwhelming debts. In some cases, such as those for Chapter 7 bankruptcy, the purpose may shift to partially reducing or entirely eliminating such debts. Bankruptcy attorneys can provide a wide range of legal services to help their clients achieve these goals. Some examples of what a bankruptcy attorney does on a regular basis can include:
- Ensuring that the client understands what bankruptcy is, how filing for bankruptcy will personally affect them and/or their business, and that they know what their legal obligations are if their petition for bankruptcy is approved by the court.
- Making sure that the client complies with all the laws and procedural requirements associated with the bankruptcy process, such as attending the mandatory credit counseling courses and the 341 meeting of the creditors.
- Gathering, drafting, and reviewing all documents and any evidence pertaining to the bankruptcy matter.
- Offering legal counsel on any questions or concerns that a client has prior to, during, and/or after the bankruptcy petition is filed.
- Explaining the rights and protections that a client has under the relevant bankruptcy laws.
- Assisting the client with further bankruptcy issues, such as resolving disputes with creditors, converting their case to a different chapter of bankruptcy if necessary, and stopping creditors from harassing them after they declare bankruptcy.
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How Much Does It Cost To File For Bankruptcy In New Jersey
While filing for bankruptcy tends to have a negative connotation, in reality, it serves as a great way for those struggling with money or debts to get a fresh start. But, as is the case with many things in this world, filing for bankruptcy is not free.
This may make it a daunting or seemingly impossible avenue to take, especially considering the lack of income that is fueling the problem, to begin with. That being said, it is important to know the different costs that are associated with filing for bankruptcy so you know if it is a viable option for you.
Why File For Bankruptcy
People wind up filing for bankruptcy for many reasons, often involving outside forces or unforeseen expenses: Medical debt and unexpected health care costs can quickly spiral out of control, credit card debt can accrue due to business expenses or needing to use a credit card during periods of unemployment and low cash flow, investments in the stock market, real estate or other financial vehicles might suffer due to a financial crisis, or a supply chain shutdown can cause debt to cascade in times of pandemic or due to oil price fluctuations. In any of these situations, a bankruptcy attorney can help you find the best course of action.
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What Type Of Bankruptcy Is Best For You
We help individuals and businesses get a fresh start from overwhelming debt obligations. Bankruptcy may or may not be the best option and our New Jersey Lawyers will take the time and advise you if bankruptcy is right for your situation. An attorney in our office will take the time to explain to you the differences between Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and Chapter 11 Bankruptcy and the best option for you. Sometimes it is better to avoid bankruptcy and settle with creditors out of court. New Jersey also has an alternative to bankruptcy for businesses called an Assignment for the Benefit of Creditorsand our law firm will go over this option if it fits as a potential strategy for your business. Correct advice from the very beginning is the most important factor in leading to a successful bankruptcy or out of court settlement with creditors. We have created a tool that helps you choose what chapter your file is most likely to be filed under. Click here to use ScuraSmart and find out a possible solution for your debt.
More Financial Hot Water Can Mean Higher Attorneys’ Fees
Our survey results showed that having more debt or more types of debts typically didn’t mean higher attorneys’ fees. However, your lawyer may charge you a higher fee if you have any of the following issues that could complicate your case :
- You have a large number of creditors.
- Youve filed for bankruptcy within the last eight years.
- You want to stop an eviction, foreclosure, bank levy, or wage garnishment.
- You have liens filed against your property.
- You are involved in litigation in state or federal court.
- You anticipate being accused of engaging in fraudulent activity .
- You have nondischargeable debts .
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Can You File For Bankruptcy And Keep Your House
A lot of people ask us the question, Can you file for bankruptcy and keep your house? The answer depends on how much equity you have in your home . Most of the time, we think of equity as how much of our house we own after our mortgage is subtracted. For example, if your home is valued at $250,000 and your mortgage is $200,000, then you have $50,000 of equity in your home.
The amount of equity a licensed insolvency trustee will work with when determining if you can go bankrupt and still keep your home or not, is a net equity calculation. They will take the value of your home, subtract what you owe, deduct all of the costs that would come with selling your home, and then use that net equity amount to determine where you stand.
If the net equity amount is above the provincial exemption maximum, you have the choice of either selling your home or buying back the amount above the exemption limit. If you can afford to buy back the excess amount, you pay it to your trustee in addition to any surplus income amount . Your buy back amount becomes part of your bankruptcy estate and it is eventually distributed to your creditors.
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Personal Issues Can Affect Attorneys’ Fees
The following issues might complicate things just enough for a bankruptcy lawyer to charge you a higher fee:
- Youre separated but not yet divorced.
- You have an obligation to pay spousal support, child support, or equalizing payments .
- You have a rocky relationship with an ex-spouse or ex-business partner.
At the end of the day, the more of these problems you have, the more likely an attorney will ask you for more money before representing you. It is always a good idea to retain a knowledgeable attorney who is well-versed in your local court’s procedures and practices in complicated cases.
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How The Type Of Bankruptcy Attorney Affects The Fee
Some people want to work in close collaboration with their bankruptcy lawyer, while others prefer as little contact as possible. The level of attention you require can be a factor in determining your fees.
For example, firms practicing bankruptcy law exclusively often save money by hiring paralegals to prepare your paperwork. An attorney will review your petition for accuracy but might not participate in the entire process. The benefit of using this type of firm is that you might pay attorneys’ fees of $1,000 to $1,200 for a straightforward Chapter 7 case.
Other lawyers with smaller practices might take a hands-on approach and be there to consult with you throughout the entire process. You can expect to pay more for that service: $1,500 to $2,000 for a standard consumer bankruptcy case.
To help you meet your particular needs, here are some questions you can ask during your consultation:
- Who will complete my paperwork?
- Who will answer my questions if I call the office?
- Will you or a junior attorney go with me to the 341 meeting of creditors?
An Attorney Evaluates Your Case For Potential Problems
You’ll disclose additional information that a bankruptcy attorney will look over carefully, such as your monthly expenses and prior property transactions. Throughout your case, the attorney is always considering whether the bankruptcy trusteeâthe person responsible for overseeing your matterâwill suspect bankruptcy fraud.
For instance, higher-than-average expenses might lead the trustee to believe that a debtor is overestimating monthly bills in an attempt to avoid paying creditors. Or, the trustee might inventory a storage facility or bank deposit box to make sure that the debtor has accounted for all property.
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Myth #: You Lose All Assets In A Bankruptcy
Another myth is that you lose everything when you file bankruptcy. Most of my clients retain all of their exempt assets in a bankruptcy. In a chapter 7, you can wipe out all credit card debt and other unsecured debt and start fresh. If you have assets that are worth more than your allowable exemptions, then you can file a chapter 13 or chapter 11 reorganizing plan to save those assets. Call one of our New Jersey or New York bankruptcy attorneys to discuss your exemptions and what you can keep.
Take The First Step Toward Financial Recovery
Hoffman DiMuzio has bankruptcy attorneys ready to meet you at its Franklinville office, just a few miles outside of Vineland, NJ.
The most critical decision for you is who you will choose to guide you through the bankruptcy process. Hoffman DiMuzio has the necessary experience and training to bring your particular set of circumstances to a favorable outcome.
Gather your documents youll need things such as:
- pay stubs,
- letters from collection agencies, and
- the value of your assets
Then, make the call to Hoffman DiMuzio at 856-637-3000 for expert counsel from a Vineland bankruptcy lawyer. Or, if youd prefer, fill out a quick contact form and a representative will contact you shortly. Hoffman DiMuzios bankruptcy attorneys will be happy to meet you at any of our six convenient office locations.
Disclaimer: please note this page was written to provide information about the law and is not legal advice. to read more about our disclaimer and our fees and services.
Speak to an attorney today. Call 856.238.5183Well schedule your consultation and meet at the office nearest you.
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Chapter 11 Quarterly Fees
In a traditional Chapter 11 case, a debtor must pay quarterly fees to the Office of the United States Trustee. These fees are based upon the debtors disbursements for the relevant quarter, and fees are on a sliding scale. This fee schedule can be found here: . Failure to pay quarterly fees can result in the dismissal of a Chapter 11 case, or conversion of the case from Chapter 11 to Chapter 7. In Subchapter V, which is a type of Chapter 11 bankruptcy, these quarterly fees are not charged, which is a benefit of electing Subchapter V.
Qualifying For Bankruptcy In New Jersey
If you’ve never filed for bankruptcy before, you’ll meet the initial requirement. Otherwise, check whether enough time has passed to allow you to file again. The waiting period varies depending on the chapter previously filed and the chapter you plan to file. Learn more about multiple bankruptcy filings.
You’ll also need to meet specific chapter qualifications.
You’ll qualify for Chapter 7 bankruptcy if your family’s gross income is lower than the median income for the same size family in your state. Add all gross income earned during the last six months and multiply it by two. Compare the figure to the income charts on the U.S. Trustee’s website .
Want an easy way to do this online? Use the Quick Median Income Test. If you find that you make too much, you still might qualify after taking the second part of the “means test.” If, after subtracting expenses, you don’t have enough remaining to pay into a Chapter 13 plan, you’ll qualify for Chapter 7.
Qualifying for Chapter 13 can be an expensive proposition because the extra benefits come at a hefty price, and many people can’t afford the monthly payment. To qualify, you’ll pay the larger of:
Find out more about calculating a Chapter 13 bankruptcy payment.
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Types Of Bankruptcy In New Jersey
There are many different types of bankruptcy, but only two of which are generally available to individuals based upon income level and the nature and amount of the debt. The types of bankruptcy include:
- Chapter 7 This is the bankruptcy filing that liquidation of debts for people who fall within the limited income category
Common Myths About Bankruptcy
Most of our bankruptcy clients do not have a choice but to file bankruptcy because circumstances in their life have spiraled out of control. Some of our clients have lost a job, are receiving less pay, became seriously ill or hurt, divorced or just plain got in over their head with debt. Our clients are good people deserving of the protection of the bankruptcy code. Our bankruptcy attorneys are surprised about some of the myths that still exist out there concerning bankruptcy and especially the myths with respect to the new bankruptcy laws as enacted in 2005. Some of these myths are being put out there by the credit card industry to scare people away from bankruptcy. Here are some common myths that we have learned about from our clients in our daily practice representing debtors in bankruptcy.
Myth #1: You Cannot File Bankruptcy Because of the Changes in the New Laws
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Not Taking Any Action
Another common approach that some people take is to do absolutely nothing. If you have no valuable assets or minimal assets and you have very little or no income, you might be classified as judgment proof. This means that if you have nothing you can use to repay your creditors, any legal judgments they obtain against you are virtually useless. They might end up writing off your debt after a few years, even if you dont pay anything at all. If your circumstances change, and you gain the ability to repay either some or all the debt, your creditors might pursue you to get repaid. You can still be harassed by the creditors as they will attempt to collect what they can from you.
Contact A New Jersey Bankruptcy Lawyer Today
Take back control of your financial future. Providing both immediate relief and long-term solutions, bankruptcy could be the answer you have been looking for. Our attorneys strive to make this process as easy as possible. Contact our law office today to schedule a free bankruptcy consultation! Call or reach out to your closest office:
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Helping People With Legal Name Changes
While bankruptcy can help people get the fresh financial start they need, we also help people get a fresh start in other areas of life.
Whether you need to correct the spelling of your name or wish to assume a new name altogether, we can help you with a legal name change and can ensure that all of your documents reflect this change.
In all situations, you can rely on us to provide personalized service that is designed to meet your needs.
How Do You File Bankruptcy Without An Attorney
Its possible to file bankruptcy without a lawyers help but consider the pros and cons before you do. The Administrative Office of the U.S. Courts strongly recommends you get advice from an attorney because of the long-term financial and legal outcomes.
You can find bankruptcy attorneys near you on Thumbtack. Start searching and comparing potential lawyers to hire.
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