I CURRENTLY HAVE LESS THAN $10,000 OF DEBT AND WAS INFORMED THAT IT WOULD NOT BE FEASIBLE TO FILE BANKRUPTCY CHAP 7 DUE TO THE AMOUNT OF DEBT BEING UNSUBSTANTIAL. IS THIS CORRECT? IF SO WHAT OTHER OPTIONS DO I HAVE TO CURE THIS DEBT WITHOUT PAYING IT IN FULL ALL AT ONE TIME? HOW MUCH WOULD FILING CHAP 7 BANKRUPTCY COST FOR CALIFORNIA RESIDENTS? AND, CAN THE COSTS OF THE BANKRUPTCY BE ROLLED INTO THE CHAPTER 7 BANKRUPTCY ?
Do you mean, could you promise to pay an attorney and then discharge that very debt in bankruptcy? Sure, you could. That's why nearly every bankruptcy attorney requires full payment up front.
You can certainly file for $10,000 in debt, and can usually do so for less than $2,000 in fees and costs. All bankruptcy attorneys will require up-front payment. Whether the bankruptcy is the best decision for you for this amount of debt is a personal decision.
Eric Ridley can be reached by phone: (805) 244-5291, by email: [email protected], or at http://www.ridleylawoffices.com This answer is intended to provide general information only. It does not create an Attorney-Client relationship, nor should it be construed as legal advice or an opinion on specific situations. Eric D. Ridley is licensed to practice law in California. The Law Offices of Eric Ridley emphasizes Estate Planning, Bankruptcy and Consumer Law & Litigation.
You can certainly file a BK on 10K of debt. But, is it wise? What type of debt is it? If it is secured debt you will have to pay it or forfeit the security. If it is non-secured and no judgment has been entered, what's the rush?
Yes, you can negotiate with your creditors for a reduction in the amount owed and can make payments. However, you should be aware that payments on any obligation may revive that obligation even if the statute of limitations has passed.
Consult personally with a BK attorney for guidance. You will get particularized answers to your questions based upon the facts of your situation. Most BK attorneys offer no obligation and no cost initial consultations. You will have to pay for your Chapter 7 up front. Attorneys do not accept payments in a Chapter 7 case.
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The debts that can be discharged are debts that are owed at the time of filing. That is why the bankruptcy attorney wants you to owe her/him $0.00 prior to filing! We want to be paid for our services. But, good question. I, personally hate to see someone file a bk for debt of less than $10K. Perhaps settlement and/or help from friends or family could help, lower expenses and/or greater income could help your situation.
This answer does not establish an attorney/client relationship. It is for general education.
When the debts is low enough to consider bankruptcy alternatives like debt settlement or debt consolidation I typically explain these alternatives and advise them that I feel it is worth trying them before choosing the BK route. Debt is relative. Someone with limited assets owing $10K while typically making $14K-20K/year is unable to repay $10K in debt, even in settlement or consolidation. Someone owing $100K who is making $100K/year might be able to settle or restructure the debt.
However, it is up to you if you wish to file BK and if a potential client with low amount of debt wishes to file and not attempt alternatives I'm glad to represent them, provided of course they pay for my services.
There are no minimum amounts of debt required to file for bankruptcy. Like some of the other attorneys said, debt is relative to each person. So if you are making $100,000 a year, a $10,000 debt might not be something that you need to file bankruptcy on, but rather attempt some alternatives to bankruptcy.
Chapter 7 bankruptcy court filing fee is $306. Attorneys fees vary. My firm has a flat fee. However, all attorneys will require you to pay the attorneys fee up front prior to filing your bankruptcy petition for you.
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