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Coral Springs Bankruptcy Attorney / Blog / Bankruptcy / Too Broke to Be Bankrupt?

Too Broke to Be Bankrupt?

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Financial issues plague many Americans. They are without work and unable to pay bills. They continue to drown in debt month after month.

Their only recourse to get out of this debt is to file for bankruptcy. However, filing for bankruptcy, ironically, takes money. People actually have to pay to go bankrupt. It is not a cheap endeavor. The filing fee alone is $310 to $335, depending on which type of bankruptcy you choose. Filing on your own is not successful. You will need to hire a lawyer to be successful, but this can cost anywhere from $2,000 to $4,000. If someone who was struggling financially had that much money, they wouldn’t need to file for bankruptcy.

Because of this reality, bankruptcy filings rise around tax season, when people get their refund from Uncle Sam. They are at their highest points in March and April, and then go back down. Anywhere from 800,000 to 1.5 million bankruptcies are filed each year. Many more Americans could benefit from bankruptcy, if only they could afford it.

Many try to file bankruptcy on their own, with low rates of success. Twice as many pro se cases as attorney-represented cases are dismissed. Some try to fill out the forms on their own and make costly mistakes. People known as “petition preparers” promise bankruptcy for low rates. People fall for these fraudsters, losing more money in the process.

One way around this is to file for Chapter 13 bankruptcy. Unlike Chapter 7, Chapter 13 does not require upfront fees. For no down payment, a person can start the bankruptcy process. However, Chapter 13 bankruptcy does not wipe out debts. Debts are repaid through a payment plan. So is the lawyer. However, many people are unable to keep up with the payments. This causes the court to dismiss their cases, and the debts return. It is a vicious cycle.

The only other option is for people to simply scrape by. If they have a job, there is the constant fear of their wages being seized by creditors. If they have a home or a car, they eventually lose them through repossession and foreclosure. There is no resolution in sight.

The best solution would be flexibility for Chapter 7 filers. If only they could find other ways to pay their lawyers, they would be able to wipe out debt and move on. There should be a way for filers to make payments over time. By allowing this, millions more Americans could have a chance at a clean financial slate. 

Contact a Coral Springs Bankruptcy Attorney  

Bankruptcy is a Catch-22 for many Americans. They need money to file for bankruptcy, but even that can be a struggle if they don’t have money to pay their bills.

A Coral Springs bankruptcy attorney at the Law Offices of Barry S. Mittelberg, P.A. can help you make the right decision for your financial situation. Get the debt relief you need and alleviate stress. Schedule a free consultation by calling our office at 954-752-1213.

Resource:

psmag.com/economics/what-happens-when-you-cant-pay-to-go-bankrupt

https://www.mittelberglaw.com/bankruptcy-vs-debt-settlement/

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