Hatfield Harris, PLLC
Local: 479-250-1962 or Toll Free: 800-491-4103

Bankruptcy filers must raise legal fees prior to starting a case

The legal fee in a Chapter 7 bankruptcy can vary widely depending on the complexity of the case. Fees have risen steadily since the 2005 overhaul of the bankruptcy laws, which impacted Arkansas and the entire country. Those laws increased considerably the amount of labor that the attorneys and their staffs had to put into a bankruptcy case.

Those consumers who are looking to file for bankruptcy may feel that they a have brick wall in their way when they do not have the legal fee required to get a case started. There are some common ways to address the problem, which center mainly on raising the funds, working a payment plan or trying to minimize costs and filing pro se. The first option may be the best, since once a person has the funds, the case can be filed and expedited without delay.

In that case, some persons who have been paying on certain debts, such as credit cards, prior to the bankruptcy can stop making the payments. It would be foolish to keep paying while considering the decision to eliminate all unsecured debt. In cases in which payments are a factor, the funds for legal fees can be made up from the stopped payments. Many persons take gifts from parents and even grandparents, which is generally a hassle-free way to do raise funds.

However, when these strategies fail, it is usually possible to work a payment plan with the office of one's consumer bankruptcy attorney. In that case, this will require a delay in filing the case until one can get all payments completed. To file a bankruptcy while still owing legal fees turns the attorney into a creditor and creates a conflict of interest. As far as filing pro se, or self-representation, this is decidedly the last option and the worst. The bankruptcy laws are more complex than ever, and filing pro se in Arkansas or elsewhere could be a self-defeating and risky proposition that makes little sense.

Source: palmbeachpost.com, "How to Pay for Bankruptcy When You're Broke", Sean Pyles, Oct. 25, 2016

No Comments

Leave a comment
Comment Information