You’ve tried everything else, and you realize that you have no alternative but to file for bankruptcy. But if you had the money to pay for your bankruptcy, you might not need to file in the first place. So how do you pay for your bankruptcy?
You Can’t Win if You Don’t Pay
The federal bankruptcy laws are very strict about how you pay the court and your attorney. Not surprisingly, you must pay the court before it allows you to file your case.
But what about your attorney? Why won’t he just let you make payments so you can get your case filed right away?
Bankruptcy law requires that you pay most if not all of your attorney fees before your case is filed. Even if your attorney wanted to provide you a payment plan so that your case can be filed quickly, he is not allowed to.
Why?
When you file for bankruptcy, most of your debt is technically eliminated immediately upon filing. This includes what you owe your attorney. Consequently, the federal bankruptcy law requires that most of an attorney’s fees be paid before your case is filed. Otherwise, you could legally choose not to pay your attorney any fees he is owed after your case is filed.
Time Is on Your Side
In most circumstances, you won’t have to file your bankruptcy immediately. Bankruptcy law does not mandate how quickly your case needs to be filed. You can wait as long as needed. And although you won’t have the protection of your bankruptcy until your case is actually filed, as soon as you hire your attorney, he will be there to handle things like creditor calls and collection letters so you don’t have to.
If you wait to file your case, this will give you time to make payments to your attorney and save enough money to pay the court. As soon as you have paid in full, your case can be filed.
The Chapter 13 Alternative
Chapter 13 is not the right bankruptcy for everyone, but if it turns out that Chapter 13 is the appropriate chapter of bankruptcy for your case, paying for your case prior to filing will not be as difficult.
Chapter 13 bankruptcy requires you to make monthly payments to the court for three to five years. You can include most of your attorney fees in this monthly payment. So you will only have to pay a small portion of the fees before your case is filed.