Hiring an experienced attorney who will take to time understand your unique financial situation is the paramount consideration. Obtaining a discharge and eliminating your debt is more important than the actual cost, as long as the cost is reasonable.
Do a cost/benefit analysis:
Bankruptcy has the immediate benefit of a good night’s sleep. The automatic stay goes into effect, and your creditors must stop all collection activity, including harassing letters and phone calls. I find the peace of mind bankruptcy affords our clients is usually worth a lot.
On the downside, bankruptcy puts a black mark on your credit report that will remain there for approximately 10 years. This will not prevent you from getting a new credit card. Our clients received offers for credit within one to two years of receiving their discharge from the court. However, bankruptcy will affect your ability to rent an apartment or get a new mortgage or car loan. Sometimes, you will pay more for credit because you filed bankruptcy.
Next, grab a pencil and paper.
In Chapter 7 Bankruptcy, you will discharge most of your unsecured debt. Unsecured debt includes personal loans, credit card debt, and unpaid medical bills. Many of our clients have unsecured debt of $20,000 or more; some owe $100,000 to credit card lenders. Discharging that much debt is almost always worth the cost of a good bankruptcy attorney.
Keep in mind that your mortgage and car loan are secured debts that can’t be discharged. Also, support payments, taxes, and student loans are considered priority debts and generally not dischargeable. Nevertheless, eliminating your unsecured debt often provides money for secured and priority obligations that can’t be discharged.
The Dollars and Cents of Hiring a Chapter 7 Bankruptcy: Attorney Fees
Your legal fee for a Chapter 7 case will depend on the attorney you hire.
