Thought bankruptcy was just for Gary Coleman and real housewives? Well, in a way, that’s not too far from the truth. As the costs associated with filing have risen annually, there is actually an increasing number of Americans who cannot afford to go bankrupt.
Chapter 7 bankruptcy averages around $1,500, along with other filing fees. A study done by professors collaborating from Columbia University, the University of Chicago, and Washington University estimated that over 200,000 Americans, who wouldn’t have the money to file for bankruptcy this year, will be using their tax refunds to file!
In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act making it far more difficult to file for Chapter 7 than previously. This was an attempt to curb the alarming number of bankruptcies taking place at that time. What does that mean for someone considering going bankrupt? A $1500 check to a bankruptcy attorney. Double the paperwork, double the hoops to jump through, double the time, double the fee for representation.
So, if you’re considering bankruptcy, better have a close attorney-friend willing to get some pro bono hours, or save up. It’s going to cost you.