Fewer individuals are filing for bankruptcy, which is a good sign after the crisis increase in the last few years. However, the high cost of even declaring bankruptcy makes it unaffordable to a lot of people.
Fewer declaring bankruptcy
The financial industry meltdown brought on an enormous surge of bankruptcy filings from 2006 to 2008. Part of the problem was also the in-crease in the joblessness rate. Deseret News explained that from 2007 to 2008, filings increased 33 percent, and it increased another 32 percent from 2008 to 2009.
In 2011, there was a 12 percent decrease in the amount of bank-ruptcies field to 1.4 million, according to the New York Times. There were also decreases seen in 2009 and 2010, when filings for Chapter 11 and 7 increased only 8 percent.
The declining number of bankruptcies is encouraging. However, the counterpart to the data is, accord-ing to CNN, which more people would file for bankruptcy if they could af-ford it.
Filing bankruptcy will cost you
The typical cost for filing Chapter 7 bankruptcy is $1,500, which means about 200,000 to 1 million individuals throughout the country cannot afford to really file for it, ac-cording to the National Agency of Economic Research. It is believed that many individuals use their tax returns to file bankruptcy.
The majority 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 obtain 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.
A less costly way
Filing for bankruptcy is much more difficult now that the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act have come out. This is why there are so many expenditures and paperwork needed to file. That means that someone has to pay a lawyer even more cash to do all the paperwork. It makes it more difficult for the poor to declare bankruptcy, although the law was meant to keep individuals from filing for bankruptcy without cause.
However, some attorneys are willing to work pro bono, or without being paid. There are pro bono associations through which one can find an attorney who might be willing to take a case. Some judges will even waive filing charges if a person's income is 150 per-cent or less of the federal poverty level.
Fewer declaring bankruptcy
The financial industry meltdown brought on an enormous surge of bankruptcy filings from 2006 to 2008. Part of the problem was also the in-crease in the joblessness rate. Deseret News explained that from 2007 to 2008, filings increased 33 percent, and it increased another 32 percent from 2008 to 2009.
In 2011, there was a 12 percent decrease in the amount of bank-ruptcies field to 1.4 million, according to the New York Times. There were also decreases seen in 2009 and 2010, when filings for Chapter 11 and 7 increased only 8 percent.
The declining number of bankruptcies is encouraging. However, the counterpart to the data is, accord-ing to CNN, which more people would file for bankruptcy if they could af-ford it.
Filing bankruptcy will cost you
The typical cost for filing Chapter 7 bankruptcy is $1,500, which means about 200,000 to 1 million individuals throughout the country cannot afford to really file for it, ac-cording to the National Agency of Economic Research. It is believed that many individuals use their tax returns to file bankruptcy.
The majority 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 obtain 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.
A less costly way
Filing for bankruptcy is much more difficult now that the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act have come out. This is why there are so many expenditures and paperwork needed to file. That means that someone has to pay a lawyer even more cash to do all the paperwork. It makes it more difficult for the poor to declare bankruptcy, although the law was meant to keep individuals from filing for bankruptcy without cause.
However, some attorneys are willing to work pro bono, or without being paid. There are pro bono associations through which one can find an attorney who might be willing to take a case. Some judges will even waive filing charges if a person's income is 150 per-cent or less of the federal poverty level.
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