Nowadays far too many Americans depend on credit. This is often the result of irresponsible spending and simply trying to obtain items that would otherwise be outside of the family budget. Using credit can also be necessary when unexpected family emergencies come up such as medical bills not covered by insurance.
Unfortunately, this situation tends to get worse over time as individuals find themselves buried deeper and deeper in debt. When there seems to be no other solutions to turn to, bankruptcy is often considered as a chance for a fresh start. But what is the cost of declaring bankruptcy?
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Bankruptcy filing fees
Well, we can start by simply stating what fees you'll have to pay to declare bankruptcy. At the time of this writing, Chapter 7 bankruptcy filings cost $274, while a Chapter 13 bankruptcy costs $189.
Bankruptcy attorney fees
Of course, these are simply the fees that you will have to pay to file with the bankruptcy court, and your attorney fees will be in addition to these costs. Anyone trying to declare bankruptcy is obviously in financial distress, so any additional expenses can be a problem. However, if your bankruptcy case is successful this means that you should have an easier time dealing with your previous debt, and this would make your lawyer fees less of an issue. Still, it's important to ask around and try to find a reasonable rate.
Long-term impact of bankruptcy on credit
In a larger sense, though, the cost of bankruptcy goes far beyond the filing fees or what you have to pay your attorney. Your financial reputation will be damaged for the next seven to 10 years, and this can make it quite difficult to get a loan at an affordable rate. Because you have declared bankruptcy, you are considered a high risk individual and will have to pay higher interest rates as a result.
Of course, your credit score will probably be the least of your worries. If you've reached the point where bankruptcy is a must, then your credit score is not a priority. The truth is that you can rebuild your credit gradually, and you shouldn't be too quick to take on new loans anyway because you don't want to end up in the same situation.
Despite the drawbacks of bankruptcy, you have to make the best decision possible for you and your family. This means taking a good look at your finances and learning as much as possible about the bankruptcy process before you make your decision.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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