It's quite common for those who've been struggling to pay their debts to find out that they can't afford bankruptcy when the time comes. Filing for a personal bankruptcy under Chapter 13 or Chapter 7 requires careful planning and an understanding of certain legal issues, and mistakes can affect your finances and your legal rights. Some people may be mistrustful of lawyers, but a bankruptcy attorney can help you save what little money you have left.

The Cost of Bankruptcy

As of June 1, 2014, the fee to file for Chapter 7 bankruptcy protection is $335. Chapter 13 is slightly less expensive, at $310 to file. Chapter 7 is the most common type, and it wipes out most consumer debt; it can cost upwards of $1000 once attorney's fees and filing costs are paid. Chapter 13 involves the reorganization and restructuring of debt, and it can cost more than Chapter 7. After the Bankruptcy Reform Act was passed in 2005, costs for both Chapter 7 and Chapter 13 rose substantially because of new requirements and limitations.

Should I Hire a Bankruptcy Attorney?

Now that you've finally decided to file for Chapter 7 or Chapter 13, you may wonder if you can afford legal representation, and you may also wonder if hiring an attorney really makes a difference. Like other parts of life, a little expertise goes a long way in getting things done right. An improperly filed bankruptcy can be thrown out of court, and you won't get any relief from your debts. Furthermore, it can leave your assets vulnerable to seizure.

If there's any way you can afford to do so, it's a good decision to seek legal counsel, but you shouldn't hire the first lawyer you find in the phone book. By asking the right questions during the interview process, you can maximize what little money you have—and you'll avoid sliding further into debt.

Pre-Filing Considerations

Before you start the bankruptcy process, and whether or not you hire a lawyer, you should consider a few factors that can help you save money and your assets. You should determine whether you're judgment proof; if so, you may not even need to file. You're judgment proof if your income and assets are few, or if they're protected under the law. Even if you're judgment proof, creditors can pursue you if your circumstances get better within the next ten years. However, bankruptcy filing legally erases your debt.

Because bankruptcy is so complex, you should learn as much as you can before filing even if you decide not to hire an attorney. By doing your research and hiring a competent lawyer before filing, you'll have a better chance at a successful case and a fresh start for your finances.

Reach out to a local law clinic, like Legal Clinic Of Jerry Paeth, for further details on starting the process for your unique situation.