Many people living in Virginia and around the country struggle with high levels of debt. While most people genuinely want to pay their creditors, the level of debt could be out of control, and an individual or couple may not be able to ever repay what they owe. In such cases, bankruptcy is an option.
Unfortunately, many people who are considering bankruptcy do not understand all of the costs involved. One of the first costs to consider is that of an attorney. Bankruptcy lawyers charge different amounts for bankruptcy cases, but typically their fees can run into the thousands of dollars.
While it is technically possible to represent oneself 'pro se" during a bankruptcy case, this is generally discouraged because the court system is designed with professional attorneys in mind. The statistics regarding pro se bankruptcy filings show a dismal success rate for those who file for bankruptcy on their own. For example, 92.8% of all Chapter 7 bankruptcy filings result in a debt discharge, but pro se filings are only successful 6.1% of the time.
Those who file for Chapter 7 bankruptcy will need to pay their attorney costs upfront. Those filing for Chapter 13 bankruptcy, which involves a court-supervised repayment plan, may be able to include lawyers' fees in the repayment plan.
Other costs include court fees, which as of 2019 were $310 for Chapter 13 bankruptcy and $335 for Chapter 7 bankruptcy, as well as payments for credit counseling and debtor education courses.
Because the cost of bankruptcy can be significant, debtors may benefit from speaking with an attorney as soon as possible. Early consultation with a lawyer may have several advantages, including obtaining bankruptcy protection before the client falls deeper into debt as well as allowing a client to file for bankruptcy while he or she still has some cash reserves to pay court costs and legal fees.