The cost of filing bankruptcy has kept up with the economy and the demand for filing services, though it is not bankruptcy legal services alone that total up the cost of bankruptcy. There are a few other factors when considering bankruptcy, that the filer needs to think about before proceeding. To summarize the basic list of costs, they are legal fees, filing fees and counseling fees. Other fees like amendment fees would apply if you had to make changes to your petition after submitting it, or conversion fees if you decide to file chapter 7 bankruptcy after having submitted your petition for chapter 13.

Bankruptcy Legal Fees

Legal fees may be the bulk of bankruptcy costs, these fees can range anywhere from $400 to $1700 depending on where you are in the country. The cost of filing personal bankruptcy has in fact gone up in the last couple of years, mostly due to the changes in bankruptcy laws, that made it more difficult for individuals to qualify for a bankruptcy discharge while also requiring more paperwork to be filed by bankruptcy attorneys. Many attorneys and law firms understand that their clients are dealing with a lot of debt and may not be able to handle the legal fees all at once. So they have made it easier for filers to take advantage of payment plans.

Bankruptcy Filing Fees

When filing for bankruptcy it would be wise to hire an experienced bankruptcy attorney, as they would be best to calculate your total bankruptcy costs as they apply to the court’s fees. As of January 2007 the bankruptcy court filing fees are $299 for chapter 7 bankruptcy and $274 for chapter 13. There are other costs such as:

1. Registration of Judgment – $39
2. Notice of removal – $250

Conversion Fees

1. Chapter 11 to Chapter 7 – $15
2. Chapter 12 to Chapter 7 – $60
3. Chapter 13 to Chapter 7 – $25
4. Chapter 7 to Chapter 11 – $755
5. Chapter 12 to Chapter 11 – $800
6. Chapter 12 to Chapter 13 – $35
7. Chapter 13 to Chapter 11 – $765

Amendment Fees

1. Schedules D, E and F – $26
2. Amendment to list of creditors – $26

Counseling fees
The basic costs of filing for bankruptcy end with the counseling fees. These are the fees you must pay to receive the mandatory counseling that the new bankruptcy laws require all filers to take prior to getting a discharge. The costs of bankruptcy counseling are rather moderate. Visit the U.S. trustee’s site for a list of approved credit counseling agencies, this portal lists the agencies by state and typically the costs are anywhere between $20 to $40 dollars. The first part of the counseling should be done prior to submitting your bankruptcy petition and the second part prior to getting a discharge.

So the overall bankruptcy costs can certainly add up and make the process more complicated for you if you don’t have the disposable income to pay for it all at once. Your bankruptcy attorney’s fees may be negotiable, or at the very least they may allow you to make installments on their total fees. However the bankruptcy court’s fees will not be negotiable these must be paid in full at the time of filing.

The world is going bankrupt

By the end of the first decade of the new millennium bankruptcy cases will have reached tens of millions in the US alone. More people will have filed bankruptcy than have acquired a college degree, retired, or have died of cancer. Current bankruptcy statistics show that businesses, banks and insurance companies are going bankrupt as well as individuals.

Banks and mortgage companies are going bankrupt because of the mortgage crisis that’s been sweeping the country for the last couple of years, while other companies and business are suffering the economic change due to lack of consumer confidence, where people are mostly willing to hold on to what they have rather than continue spending on non-essential items.

Other reasons that contribute to the high number of bankruptcy filings, including loss of employment for a great number of individuals, medical bills, credit card debt, becoming disabled, loss of a primary income provider and of course identity theft, which is becoming less rare. Is spite of the changes implemented in bankruptcy law in October of 2005, making it more difficult for individuals to qualify and discharge their debts through bankruptcy, the number of bankruptcy filings seem to have kept up the pace.

Bankruptcy alternatives become less feasible

Although bankruptcy alternatives have always been encouraged, the current bankruptcy trends provide proof that it has become less effective for individual filers to properly rely on bankruptcy alternatives such as debt consolidation, credit counseling or negotiating directly with their creditors.

The pressure that creditors put on debtors only adds to their inclination to end it all by going with the one option that can and that is by “filing bankruptcy”. Even after making the decision of filing bankruptcy, individuals become weary of the fact that bankruptcy is a decision that will impact their lives severely in terms of credit worthiness.

The most common alternative to bankruptcy is usually debt consolidation, however this often results in an even larger problem for the debtor as these types of programs often carry high fees for the service. Also there are a lot of companies that often pose as non-profit companies helping people to get rid of their debt through debt consolidation but in fact have a number of hidden fees and leave the debtor with even more debt.

Realistically the best option today for someone who’s heavily burdened by consumer debt and have little or no income, is bankruptcy chapter 7 in which all unsecured debts can virutally be wiped out. For consumers who have assets they want to hold on to and have predictable and stable income, the best option is bankruptcy chapter 13 where their debts can be restructured for easier more manageable payments.

How does your credit look after bankruptcy?

After getting your bankruptcy discharge you need to prepare to tackle the task of making sure that credit entries in your credit report are not still showing delinquent accounts. Anything that should have been included in bankruptcy needs to be labeled as such. About 3 months after your bankruptcy discharge you need to take a close look at your credit report and fix any erroneous entries. These can cause trouble for you down the road qualifying for credit, loans, jobs etc.

You’ll be able to get your credit report from all three credit bureaus by visiting Annual Credit Report, everyone is entitled to a free credit report per year. When you get your report you are very likely to find accounts that have not been cleared after filing bankruptcy. It’s common for creditors not to bother to make these updates especially since they’re not getting paid, they’re certainly not interested in doing any favors. However, you must correct these errors yourself.

Repairing your credit report after filing bankruptcy

Ideally you’d want to wait from 3 to 6 months to get your credit reports and start spotting anything that should have been included in bankruptcy. If you find that accounts that should now be closed are still open and delinquent, then what you need to do is make a copy of your bankruptcy schedules and discharge documents and start a dispute with the credit reporting agencies (Transunion, Equifax and Experian). Your discharge papers are the key to get this resolved. This can also take sometime since the verification process is slow.

Hiring credit repair services will work better for anybody, it’s definitely a good option, just be ready to provide your bankruptcy documentation. Credit repair agencies are more effective at doing this, however you must take care to hire only a legitimate credit agency for this industry is filled with scams.

Bounce right back after bankruptcy

Repairing your credit is only one aspect of getting your financial life back on track. You have to now work a little harder to convince creditors that you’re still worthy of getting credit. Even after you get your credit entries corrected, you should know that your bankruptcy file will remain on your credit report for up to 10 years, however that big dark cloud can being to dissolve with positive credit entries that you should be striving to achieve.

There are several ways to regain control of your credit after filing bankruptcy, depending on what you want to accomplish, be it a mortgage, auto loan or a credit card. Your credit report must accurately report your financial history for you to begin rebuilding. Once you do that there many programs that offer bankruptcy credit cards, personal loans and mortgage loans after bankruptcy. Read the post on Getting a mortgage after bankruptcy for more info.

Buying a home after bankruptcy

This is more of a myth than most people realize, the fact is that it is definitely possible to get a mortgage loan after bankruptcy. Sure, getting to a stage in which lenders will consider you again is still a bit tough, but generally the belief is that since personal bankruptcy stays on your record for up to 10 years you have to wait that long to get a mortgage loan or consumer credit again. It’s not that way at all. Credit after bankruptcy is possible when you take back control of your personal finances by implementing rigorous changes for repairing and bringing your credit to a healthy state again after bankruptcy.

Getting the necessary credit for buying a home after bankruptcy just requires you to know how. It’s true that filing bankruptcy deals a devastating blow on your personal credit, but the effects of bankruptcy can be overcome with an aggressive campaign on your part for rebuilding your credit properly and legally. When you apply for a mortgage after bankruptcy, you need to make sure your lender has in front of them a solid record of consecutive positive entries in your credit report. This should include a reference from your current landlord and rental receipts that prove that you made your monthly rent payments on time for at least a year.

Cleaning up your credit report after bankruptcy

This is not an invitation to hire a credit repair agency and attempt to delete your bankruptcy record from your credit report. Remember that you only have the right to dispute true inaccuracies in your credit report, if all else is accurate disputing them with the help of an agency may prove expensive and ultimately useless.

If you really want to qualify for a mortgage loan after bankruptcy, it’s imperative that you clean up your credit report. Meaning that you need to get copies of your credit report from the three credit bureaus and study them side by side making sure that accounts that were discharged in bankruptcy are not still labeled “defaulted” “open” or “overdue”, even if your creditors are not collecting from you, these are the red flags that will keep you from getting a mortgage loan. If this is the case for you, start by using the dispute systems from the three credit bureaus. You should also have copies of your personal bankruptcy discharge papers ready to send to the bureaus if they require them.

Another good way to being ranging high enough for a mortgage after filing bankruptcy is to get a bankruptcy credit card or a secured credit card. You’re going to need two types of payment history to successfully rebuild your credit and they are “installment credit” and “revolving credit”. When you show installment accounts in your credit history these will include current mortgage loans, auto loans, student loans etc. Revolving credit is typically unsecured credit, however qualifying for unsecured credit after bankruptcy is a bit tough, so a secured credit can be a great option. With a secured credit card you will only be able to spend up to the credit limit set by the amount you deposit in the credit card account. So it’s a prepaid credit card basically and it may seem like a burden to send money to a credit card company so you can spend it later, but it’s an important step in qualifying for a mortgage loan again after filing bankruptcy.

Other tips for getting a mortgage loan after bankruptcy

As mentioned above, you would want to show installment accounts on your credit report, this will server as a great reference and increase your chances of becoming a better prospect to mortgage lenders. However, car payments and the interest rates attached to car loans are typically high if you’ve been bankrupt. You have to realize that in order to qualify a mortgage after bankruptcy, your debt to income ratio will be the deciding factor. The lender has to make sure that you have the needed income to make your monthly mortgage payments again and then some. So resist the urge to buy a new car and ignore the recommendations from auto loan companies that this is a good way to rebuild your credit. It is only if you have enough income to cover a mortgage loan after the fact, that you should consider financing an auto purchase.

Pay your monthly bills on time. You can not afford any more glitches or blemishes on your credit report. Being able to get credit after bankruptcy is all about continuous positive entries in your credit report and nothing else. This applies not only to your consumer debt accounts but your rent, utilities, and any other obligations you have. Mortgage lenders will be more inclined to dig a little deeper if you have filed bankruptcy and are trying to qualify for a mortgage again, so show a good trail of positive credit entries and life after bankruptcy will simply get easier as you begin to regain the trust of lenders again.

If you have been paying your bills on time and are ready to apply for a mortgage loan again, another reference that can give you some leverage in qualifying for that loan is to have a letter of credit from the non-traditional credit companies such as your utilities companies, hence the reason why you must always make these payments on time as well. You can include your cell phone company, your electrical and cable companies, it’s as simple as contacting them for a letter of credit and as long as you have a positive record with them, it should not be a problem.

Finally, you may also be required to give a larger down payment on your new home before you can qualify for the mortgage loan, this can be an obstacle if you don’t have 20 to 30 thousand worth of liquidity to finance your purchase. You may be give the advice to borrow the money from you 401k, IRA or other retirement account, which is not uncommon for buyers who want a mortgage loan after bankruptcy, but it’s a decision that you should consider carefully, since you may have to pay back the money you borrow from your retirement account, otherwise you’d have to cash it all out and pay the tax and penalties as well.

As the economy continues to be the main cause of concern for most Americans, people are starting to consider bankruptcy as way to find relief from their overwhelming debts. The real estate crash and the high price of fuel are only part of the reason, while credit card and other unsecured debts have contributed heavily to the current burden of debt many people live with today and have a tough time keeping up with. So it begs the question, should you take advantage of a free bankruptcy evaluation?

If you’re in financial stress, there are several reason why you should consider taking a free evaluation with a bankruptcy attorney, and one of the most important ones is that you need to accurately find out right now where you stand financially. A bankruptcy consultation can clear a lot of doubts about the process. It is during this initial consultation that your attorney can run the bankruptcy means test for you, this is the determining factor in whether first of all you qualify to file for bankruptcy or not, once that’s determined further calculations of the means test can specifically tell you which bankruptcy chapter you’re eligible for.

Other things that can be revealed and may surprise you to find out during this consultation is that there are certain debts that can not be discharged under any bankruptcy chapter. These include tax arrears, child support payments, judgments against you and student loans to name a few. This is a very important reason to consult with a professional bankruptcy attorney, since most people can not make this determination on their own. If your case consists of mostly these kinds of debts then it’s possible that bankruptcy protection is not possible for you, instead you may consider debt consolidation under a different type of service.

Filing chapter 7 vs chapter 13

If have you considered bankruptcy but are not familiar with how it really works, you may be under the impression that by filing bankruptcy you’ll end all your financial troubles. Again, this is the reason why a bankruptcy evaluation with an experienced attorney is necessary. As mentioned above, during your evaluation you will find out which chapter best suits you after your attorney runs the means test on your case. This will depend on whether the bulk of your debt is secured or unsecured debt and whether you have the necessary disposable income.

There are very significant differences between chapter 7 vs chapter 13 bankruptcy, mostly in that in chapter 7 bankruptcy you get to discharge your unsecured debts and in chapter 13 you simply rearrange your debts into more manageable terms of repayment. Under chapter 13 your debts can be reduced and as long as the bankruptcy court and trustee accept your new terms of repayment then you will get a discharge once the debts are paid off.

All of this information will be better explained by a bankruptcy attorney in your area, you do not need to struggle with learning the bankruptcy code and attempting to apply the laws to your case on your own. Even if you do not end up filing with the help of a bankruptcy firm, you will get a lot of insight into the process by taking advantage of a free bankruptcy evaluation. Many law firms offer free evaluations and one on one consultations so take the time to find a reputable firm and bring your case to be evaluated you’ll gain a wealth of knowledge in the process.

To take advantage of a free bankruptcy evaluation now, visit our bankruptcy services evaluation review page and fill out a simple online evaluation form, you’ll then be contacted by a bankruptcy attorney in your area to get your process under way.

Stop foreclosure of your home

Without bankruptcy protection you have nothing to help you stop your mortgage lender from repossessing and foreclosing on your property if you’re behind on payments. Bankruptcy law can stop the foreclosure process at anytime before the sale occurs, typically you’d want to file bankruptcy chapter 13 since this chapter will allow you to reach a new agreement for paying the arrears on the mortgage. Chapter 13 makes more sense for filers who want to keep possession of a particular asset such as home. No part of your loan balance or past due payments will be discharged, this will only allow you catch up on payments.

Discharge credit card debt and other unsecured debts

When settling credit card debt with your creditors proves to be impossible because of the terms they impose, consumers have the option of filing for chapter 7 bankruptcy in which typically all unsecured debts may be discharged. Discharging unsecured debt is a way to get a fresh start, if the debt can not be discharged because the means test does not back up the level of financial hardship, the debt can be reorganized under chapter 13 bankruptcy instead with a new repayment plan that normally let’s you, the filer, come up with the repayment plan.

Stop Wage Garnishment

When judgments are brought against you by your creditors or collections agencies, one of the many weapons they use to collect payments from you is wage garnishment. This typically means that a percentage of your salary is legally withheld by your employer to send to the collectors. This percentage is not usually something that you determine but it is decided by the collectors and this often creates serious financial complications for the debtor. Filing personal bankruptcy will end of all of this, restoring the full transfer of your earnings directly to you. Early in the process of filing bankruptcy it will be determined whether you’ll benefit from either chapter 7 or chapter 13 bankruptcy, then ultimately the outcome will be that either you get a discharge of your unsecured debts or a rearrangement of your total debts under a new repayment plan, but either way the collectors no longer have the right to garnish your wages again.

Filing for divorce

When you or your spouse file for divorce the marriage may end up with a pile of assets and debts, usually more debts than assets for the average American family. Filing for divorce and dividing up the assets and debts may leave one of you with more than your fair share of debt and not enough assets. Normally you would want to file for divorce first and then file bankruptcy, however it’s best to get a bankruptcy attorney’s opinion on this. Depending on which state you are in, all assets may be considered community property and used in the bankruptcy estate, otherwise only jointly held assets can be used, then individually held assets may be used to pay for the debts inherited after the separation. Bankruptcy law and divorce law are not under the same federal code, so it’s important that you seek professional help to accurately file for both.

Being the victim of identity theft

This is perhaps the worse situation to be in, having your identity stolen, not having the adequate protection to restore your identity and clear your name, bankruptcy can be an option. However, this is only if your disputes are rejected by your creditors and you have no way of proving that the fraudulent charges were not made by you. Depending on how long and how much was charged with your accounts you could end up with a huge collection bill. As a victim of identity theft you have rights and you should contact the Federal Trade Commission, should you become a victim of identity theft and find yourself in a situation where no creditor will entertain your dispute. In this case you should only file bankruptcy if you have no other way to stop creditors from collecting from you and you have no way of proving that your identity was stolen and used by someone else.

There are many other reasons to file bankruptcy and they’re typically very unique to each individual, but the most common reason is still large amounts of credit card and unsecured debt. There are also other reasons that can be beyond your control like the divorce, a death in the family where the primary provider passes on leaving a single parent to provide for children, having your identity stolen and not being able to resolve the fraudulent charges. These are special circumstances but are not that rare.

As always remember that bankruptcy should be your last resort, if you have already exhausted every option and have found no real alternative and no feasible way to come out of debt, then begin your research phase and understand what chapter 7 and chapter 13 are all about and how they can help you. Also take advantage of a free bankruptcy evaluation by simply contacting bankruptcy attorneys in your area or filling out an online bankruptcy evaluation form to get connected with an attorney in your area.

In a recent interview on CNS news, Paul Ryan, the ranking republican on the House Budget Committee speaks about the fiscal path the U.S. government is on and the inevitable results it is due to yield, should a dramatic change in economic spending not happen.

Ryan affirms that all actuaries at the federal government, that is everyone who’s keeping tabs, are predicting that the U.S. government is headed for bankruptcy. The country has grown at an unsustainable pace and it is now more than ever harder to pay the bills. In order to fulfill the commitments and promises for entitlements like social security benefits, medicare and medicaid that the U.S. government has made, which are only the basics, it would take roughly 53 trillion dollars invested at significantly high treasure rates just to pay for these entitlements. If this is not making you nervous, read the paragraph again.

That’s about half a million dollars per household. What’s the solution to this? The congressional budget office, predicts that in order to have these 53 trillion dollars handy the current tax rate for low income families would have to go up to 25%, while the medium bracket income would need to jump to 66%, and the high bracket to 88%. Obviously this is not a realistic plan that can be implemented at anytime for it would simply destroy the economy and trigger another depression.

Keep in mind that this figure of 53 million dollars is only addressing the three major entitlement listed above, these responsibilities currently consume about 60% of the total fiscal budget. This figure does not take into account the need to maintain the national armed forces.

The U.S. has always run under the legacy that each generation confronts the problems of today so that future generations would be better off, safer and wealthier. Unless there are dramatic adjustments to the current spending and necessary changes are made to the entitlement programs so they more realistically reflect today’s economy, there is no doubt that future generations will have inferior living standards, in which we will have massive tax burdens and individual income deficits.

Congressman Ryan further explains that should the government begin to implement the unproposed solution of taxing at higher rates to pay for these programs, the rate of bankruptcies across the country would begin to increase. Further changes to bankruptcy laws can also be expected, while the entire economy would stagnate and surpass Europe in levels of unemployment.

In 10 years time the worse is still to come as the number of baby boomers are increasing every year, the reality will be that these entitlement programs will simply run dry.

In spite of all these facts, it is now harder than ever to get everyone in government to agree that this is a situation that needs immediate attention. It appears that no one really wants to hear it and no one really seems to know what to do about it. Congressman Ryan and his staff however, have proposed a plan, a road map to reform our current spending and taxing that is believed to have accurate and factual data that can restore solvency on a long term basis. The plan was introduced for legislation as (H.R. 6110).