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Many people in debt can't afford to file for bankruptcy

Many people opt to file bankruptcy to try to get back on top of their finances. While this might sound like it would work, it often doesn't. The issue that many people face is that they don't have the money to file their case. They have to cover the cost to file, as well as attorney fees. But, people who file bankruptcy shouldn't skimp on the attorney.

National filing data shows that people who have an attorney fare much better in Chapter 7 cases than those who go through the process pro se. People who use petition preparer services typically fare just as bad as those who prepare everything on their own.

Individuals who can't afford to pay the upfront fees of a Chapter 7 bankruptcy might choose to seek protection under Chapter 13. Because you are placed on a payment plan with a Chapter 13 bankruptcy, your attorney fees and filing fees might be rolled into the payments. Still, you have to ensure that you will be able to make all the payments for three to five years before the case is discharged.

Lawyers require upfront payment for a Chapter 7 bankruptcy because their fees would be discharged as part of the case, and they wouldn't receive payment for their services. This leaves filers in a precarious position because they might not have the money to file, but they might not have the income to qualify for a Chapter 13 case.

If you are drowning in debt, reviewing a personal bankruptcy filing can be beneficial. You can learn about your rights and responsibilities, so you are ready to file when it is time.

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