Who Pays for Bankruptcy?

Georgia attorney explains bankruptcy costs

Although bankruptcy is a legal remedy for people who can’t keep up with debt payments, there are costs involved in obtaining this protection. Depending on the complexity of your case, there may be court fees, legal fees and other expenses totaling a few hundred to a few thousand dollars. At Jeff Field & Associates, we can help determine ways to make bankruptcy an affordable option for you.

Fees paid when filing for bankruptcy

These are the principal fees and costs associated with bankruptcy:

• Credit counseling and debtor education — You must take a credit counseling course before you file and a debtor education course soon after. Course providers must be court-approved but they set their own fees.
• Court fees — You will need to pay a filing fee at the beginning of your case and may incur additional fees as the case progresses.
• Attorney fees — Your attorney will charge you for time and expenses representing you in the case. Legal fees must be reasonable. The benefits of a bankruptcy lawyer justify the cost.

In a Chapter 7 case, you might be able to pay your filing fee in installments and, if your income is less than 150 percent of the poverty line, we can ask the court to waive the fee entirely. If you can’t afford the credit counseling and debtor education fees, we can ask that those be reduced or waived as well. However, if you file for Chapter 13 bankruptcy, the court will assume you can pay the fees. We can help you determine if bankruptcy is affordable for you and help find ways to manage the costs.

What happens to the debt during a bankruptcy?

If you need to file for bankruptcy, you aren’t likely to have enough assets to pay off your creditors. Unsecured creditors — those without the right to foreclose on or repossess your property — are the ones least likely to be paid, but even secured creditors might not get the full amount you owe them. Unless a debt is nondischargeable, the creditor will have to write off the debt as uncollectible. We can use the threat of bankruptcy to secure more favorable terms from your creditors, or bankruptcy itself to wipe out or reduce your debts.

Some debt gets paid based on chapter of bankruptcy

Another important factor in determining how much of your debts are paid is whether you file under Chapter 7 or Chapter 13. In a Chapter 7 bankruptcy, your assets can be liquidated to pay off creditors, but you can exempt certain types and amounts of property, which often means creditors receive nothing. We can help you use all available Georgia bankruptcy exemptions to protect as much of your property as possible. In a Chapter 13 bankruptcy, you keep your property but repay a portion of your debts on a court-approved schedule. At the end of the case, your remaining unsecured debts are discharged. We can also negotiate with your creditors for refinancing of secured debts on more manageable terms.

Does the government pay for bankruptcies?

In appropriate cases, the court may waive any of the fees and costs of bankruptcy. This can occur if you meet the poverty line requirements and can’t pay the fee in installments over 120 days. We can explain that in more detail.

Do taxpayers pay for bankruptcies?

When the government waives the costs of bankruptcy, the expense technically is borne by taxpayers. However, the cost of bankruptcies is a very tiny drop in the ocean of federal spending and has no impact on your own tax obligations.

Take control of your finances and reclaim your life

From offices conveniently located in Athens, Scottdale, Douglasville, Marietta, Gainesville and Lawrenceville, Jeff Field & Associates represents clients throughout the Atlanta metropolitan area. To schedule an appointment, call us at 404-381-1278 or contact us online.