Filing Bankruptcy Could Cost You a Lot Now and Later
Kukec, Anna Marie, Daily Herald (Arlington Heights, IL)
Byline: Anna Marie Kukec Daily Herald Business Writer firstname.lastname@example.org
Even if you're broke, it's going to cost you.
The costs of going through the bankruptcy process, including lawyer and court fees, could run into thousands of dollars. And depending on the type of protection you're seeking and the complexity of the case, it could last as long as five years.
Filing bankruptcy isn't an overnight cure for mounting debt. And it's not as easy to walk away from that debt as you might think. With changes in the federal bankruptcy law in 2005, consumers face more stringent rules on filing, mostly to make it even tougher for those who may abuse the system by filing more than once, experts said.
"Bankruptcy is a tool,
not a means to an end," said bankruptcy attorney Paul Bach, of Northbrook, state chair for Illinois with the National Association of
Consumer Bankruptcy Attorneys.
Depending on the type
of bankruptcy protection being sought, initial filing fees in U.S. Bankruptcy Court range from $274 to $299; financial counseling could cost up to $50; attorney fees range from $600 to $3,500 or more.
If you choose Chapter 7, where you can walk away from the debt and start fresh, you likely could be done within a year. But if you're still employed, then Chapter 13 provides a payment plan and a process that could last up to five years.
When you do emerge from bankruptcy, you'll face other costs.
Just for starters, a credit card could carry a higher interest rate and utilities likely will charge higher, upfront deposits, depending on your payment history with that utility. …