It's a common and reasonable question, "How do I pay for my bankruptcy?"
In a Chapter 13 bankruptcy, the bulk of the legal fees and court costs are paid through the Chapter 13 plan. Generally, some money is paid up front to cover the court filings and initial work needed to file the bankruptcy petition. The remainder of the fees and costs will be paid to your bankruptcy attorney over the course of the 3 to 5 year plan, through the plan itself.
If attorney fees in a Chapter 13 bankruptcy go beyond the normal amount anticipated, your attorney may file a "fee petition" to collect additional fees. However, the good news is that these fees are also paid through the Chapter 13 bankruptcy plan. None of the extra attorney fees will come out of your pocket directly; in fact, money formerly directed to your unsecured creditors may be used to pay your attorney fees at this point.
It should be noted, a fee petition will never occur without your knowledge or approval. A fee petition must be approved by the court and served on you before it will be approved. You will always have a clear, exact idea of what your attorney fees are when you retain my office.
Paying for a Chapter 7 bankruptcy can sometimes be trickier. Chapter 7 bankruptcy involves lower income filers, so money is often tighter. Knowing this, my office strives to offer flexible payment plans. I know that sometimes it will take weeks to pay me, sometimes months. An important part of my job is making it work. Whether the payments are large or small, my office will provide the same exceptional service and care.
Payments can also be made by third parties, such as parents, friends, and siblings. Gifts such as these are permitted to help debtors file bankruptcy. Tax returns can also be used, and this is important to keep in mind early in the calendar year. If you are anticipating a large tax return, use it to clear out your old debts! We can figure out a way to work with your current budget and financial situation.
Considering that bankruptcy can save tens-of-thousands of dollars, the fees involved shouldn't be viewed as something that cannot be overcome. Contact us for a free consultation and we can discuss your best way to pay for bankruptcy.