Bankruptcy Unaffordable To Some People
The crisis of bankruptcies in the last couple of years has slowed down somewhat, as fewer people are filing for Chapter 7 or Chapter 11 protection. However, a lot of people are not declaring bankruptcy because they cannot pay for to do so.
Bankruptcy not as often
From 2007 to 2008, bankruptcy filings in-creased 33 percent, and it increased 32 percent from 2008 to 2009, according to Deseret News. A lot of people wound up declaring personal bankruptcy between 2006 and 2008 because joblessness went up and the financial industry melted.
The increasing rate slowed quite a bit from 2009 to 2010 with only an 8 percent increase. There were 1.55 million filings for Chapter 11 and 7 bankruptcies during that year. In 2011, there were only 1.4 million filings, a 12 percent decrease, according to the New York Times.
The positive data is not really all that positive when you consider the individuals are not filing for bankruptcies because they just cannot pay for to, according to CNN.
Filing bankruptcy will cost you
The National Bureau of Economic Research found in a recent report that the average cost of declaring Chapter 7 bankruptcy is at least $1,500, which is estimated to put the cost of declaring bankruptcy out of reach for anywhere from 200,000 to 1 million individuals nationwide. The report's authors believe that tax returns can be used to file for Chapter 7, the most common form of bankruptcy.
The bulk of the cost goes to bankruptcy attorneys. Of the $1,500 total, $300 is the mandatory federal court fee for filing to declare bankruptcy. When people file for bank-ruptcy, they are mandated to take debtor's education courses and get pre-bankruptcy counseling, the fees for which add up to about $85 in most cases. That still leaves more than $1,000, most of which will go to a lawyer.
Ways around it
Part of the expense involved is incurred by additional hoops to jump through and paperwork required by the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, which has made declaring bankruptcy more difficult to do. Inexorably, that involves more legal work and thus more in legal charges. The law was passed in order to reduce un-necessary or frivolous filings, but critics have contended the law puts bankruptcy further out of reach for the poor.
An individual can waive filing fees in some cases if their income is 150 percent or less of the federal poverty level. You may also be able to find lawyers that are willing to work without pay. There are some lawyers out there who are willing to do so.
Bankruptcy not as often
From 2007 to 2008, bankruptcy filings in-creased 33 percent, and it increased 32 percent from 2008 to 2009, according to Deseret News. A lot of people wound up declaring personal bankruptcy between 2006 and 2008 because joblessness went up and the financial industry melted.
The increasing rate slowed quite a bit from 2009 to 2010 with only an 8 percent increase. There were 1.55 million filings for Chapter 11 and 7 bankruptcies during that year. In 2011, there were only 1.4 million filings, a 12 percent decrease, according to the New York Times.
The positive data is not really all that positive when you consider the individuals are not filing for bankruptcies because they just cannot pay for to, according to CNN.
Filing bankruptcy will cost you
The National Bureau of Economic Research found in a recent report that the average cost of declaring Chapter 7 bankruptcy is at least $1,500, which is estimated to put the cost of declaring bankruptcy out of reach for anywhere from 200,000 to 1 million individuals nationwide. The report's authors believe that tax returns can be used to file for Chapter 7, the most common form of bankruptcy.
The bulk of the cost goes to bankruptcy attorneys. Of the $1,500 total, $300 is the mandatory federal court fee for filing to declare bankruptcy. When people file for bank-ruptcy, they are mandated to take debtor's education courses and get pre-bankruptcy counseling, the fees for which add up to about $85 in most cases. That still leaves more than $1,000, most of which will go to a lawyer.
Ways around it
Part of the expense involved is incurred by additional hoops to jump through and paperwork required by the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, which has made declaring bankruptcy more difficult to do. Inexorably, that involves more legal work and thus more in legal charges. The law was passed in order to reduce un-necessary or frivolous filings, but critics have contended the law puts bankruptcy further out of reach for the poor.
An individual can waive filing fees in some cases if their income is 150 percent or less of the federal poverty level. You may also be able to find lawyers that are willing to work without pay. There are some lawyers out there who are willing to do so.
About the Author:
Are you in the midst of a Idaho bankruptcy problem and looking for somewhere to turn? Let the legal staff at SouthwellORourke help find you the best bankruptcy attorney Coeur d'Alene around.
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