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How much does a bankruptcy in Texas
cost?
Filing bankruptcy with an attorney can be expensive,
but in some cases it is slightly better than a foreclosure.
There are two types of bankruptcy that affect the average
person, and it depends on each individual situation what type
of bankruptcy to file and how expensive it is.
To file a Chapter 7 bankruptcy in Texas will
cost at least $299 plus any attorney's fees that may be acquired
while filing the bankruptcy and reopening a Chapter 7 will
cost at least $260, both of which are higher costs than previous
years.
A Chapter 7 bankruptcy is slightly more expensive
than a Chapter 13 bankruptcy, but the advantage is that most
debt can be wiped out with a Chapter 7. Keep in mind, though,
that filing a Chapter 7 will not likely protect property indefinitely.
Usually, filing a Chapter 7 only protects property
until the mortgage lender can go to court and have the stay
on the property removed. A stay is what gives protection to
the debtor from creditors and puts a hold on assets so that
they cannot be taken.
Filing Chapter 13 bankruptcy is slight less
and expensive and somewhat more common since new bankruptcy
laws were enacted in 2005 that disallow some individuals to
file Chapter 7. A Chapter 13 bankruptcy will cost at least
$274 plus any attorney's fees and reopening the bankruptcy
will cost no less than $235.
And just like Chapter 7, most attorneys will
expect fees up front before helping you file. Chapter 13 bankruptcy
does not "wipe out" all debt, and therefore could
be considered more expensive than a Chapter 7 because the
filer will still be liable to make payments and must have
a regular income in order to file Chapter 13.
Bankruptcy doesn't seem like an option because
it is too expensive to file in a time when money is difficult
to come by. To overcome this obstacle, an installment payment
plan can help with the filing cost where typically the installments
run about $50. And additional good news is that the filing
cost is for one person or a married couple together, so that
saves an additional filing fee between spouses.
In most situations, attorneys will advise the
spouses file jointly. There are a few situations in which
only one spouse will file bankruptcy, especially when the
bankruptcy is to protect against foreclosure. More good news
is that attorneys can file the bankruptcy electronically for
no extra cost in some areas provided the attorney does not
charge extra fees for it. The bad news is that the filing
fee is not the only cost of filing bankruptcy and as mentioned
earlier, any good attorney will probably want at least some
of the fees up front.
Filing for bankruptcy costs more than just the
fees, though. It can also cause damage to credit reports.
But it may not be that much of a hit over what has already
affected credit leading up to the bankruptcy considering that
there may already be plenty of late payments to ruin a credit
report. And some attorneys are too quick to suggest bankruptcy
when better options are available. So always be careful
to do the research and make sure the best option is chosen
considering the situation.
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