Bankruptcy Overview: Things You Need To Know

Many people in the world today are facing bankruptcy. This is the legal status of a person or company that cannot repay debts he owes. The debtor initiates this status before a court can impose it. Such legal issues can be quite complicated and it would be wise to consult an attorney specializing and experienced in this area. You should also be aware of the components making up bankruptcy attorney fees.

Bankruptcy is among the debt relief solutions and is also a way of having a fresh financial beginning. People should however consult specialized attorneys before opting for this solution. The attorneys provide the necessary information to enable people make informed decisions. They assess the case and advise the client on which suit to file. They also file the required paperwork, present the case before a judge and also organize creditor meetings.

Such cases are sometimes complex based on the kind of case filed. There are mainly two types of cases under this category namely reorganization and liquidation. The attorneys may charge a varying fee depending on location, type of case and the firm. There are several components of the bankruptcy attorney fees and understanding them is important.

Basic filing fee is one of the components. These are fees you pay when your documents are filed with the court and they may differ from one state to another. These charges may also depend on the kind of case you have filed. Liquidation suits for instance could cost less than reorganization suits as they are more complicated.

The other is the attorney fee which is usually the largest component of these suits. The amount may vary from one firm to the other and the type of suit filed. A standard Chapter 7 case may be cheaper as it is more straightforward. Chapter 13 cases are more complex because they require lots of additional information and so they are more expensive.

There are also additional costs that you may be required to pay. They include payment for compulsory finance management and credit counseling classes offered after and even before the suit to assist you to manage your cash better in future. You could also be required to pay cash to facilitates meetings with your creditors.

These specialized attorneys help those who cannot pay their creditors to get a fresh financial start. This can be done in various ways including reorganization or liquidating assets to pay off debts. For this process to succeed it is important to choose experienced and specialized attorneys and also understand the components of bankruptcy attorney fees.

16 Replies to “Bankruptcy Overview: Things You Need To Know”

  1. If I am the person/ company who got bankrupt and needed to undergo all those processes and fees including basic filing fee, attorney fee, etc., I would think I will be more bankrupt than I am. Now, I understand why most people choose to run away than file a bankruptcy report. Too much work!

  2. Filing for bankruptcy does seem like a viable solution for one seeking fresh financial beginning but a specialized attorney definitely helps a lot.

  3. Before reading this article I thought bankruptcy was just the fact of running out of money. I didn’t even know it was actually a “debt relief solution”, which is really interesting. However, I think one shouldn’t consider such solution without consulting a good attorney first.

  4. With all these complications, I think it’s really better to find an attorney. Though, it is good to know the important details.

  5. Filing for bankruptcy sounds more complicated to me than it really is. I wonder if filing and the process is similar to countries here in Asia…

  6. Thanks for the basic information, but do you have any idea how much the fees will go? I have been hearing a few of colleagues filing bankruptcy, but I’ve always wondered how they’re able to afford attorney fees if their broke.

    1. Hi Savannah, this is why you should get a consultation with different bankruptcy attorneys (usually initial consultation is always free) whereby they can give you more details on their process and fees. Also you will get a chance to see if you even feel comfortable and confident with them handling your case.

  7. There are too many fees involved before filing for bankruptcy. Someone who has financial problems should not be expected to pay for something like financial counseling considering he has spent a lot of money on a lawyer and filing fees.

  8. With economic advancement also comes the ever-growing financial difficulties. Let us not only become wise to consult an attorney when already faced with debt issues, but be wiser when we still have all our assets on good times. Great article!

    1. Yes a lot of people take for granted the good times, but those are the times to press ahead and not wait for disaster to strike.

  9. There are a number of occasions when debtors file for bankruptcy due to circumstances not of their own making, for example a depressed economy. This calls for understanding on the part of the creditors and the legal system. Creditor meetings should be promoted as a way to more amicable solutions.

  10. It’s important to note that bankruptcy creates a dire state of anxiety and emptiness(spiritual and financial) in either an individual or an organization that experiences it.What is alarming most of the time, is that most people or organizations like so,crumble, since they do not seek help from individuals trained in the field of law related to bankruptcy,who can ‘rescue’ them from what seems a bottomless pit.Most opt to ‘ runaway’ from reality.As stated ,through meetings, it is key to bring the creditor and debtor back to a level of understanding that was there before the bankruptcy.When positive things happen there is need to be together to celebrate.When negative things happen people should also come together to find lasting solutions to the misfortune which in this case is bankruptcy.Professionalism,understanding and dialogue are key when things go south.

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