Fewer individuals are declaring bankrupt-cy, which is a good sign after the epidemic boost in the past few years. However, the high cost of even declaring bankruptcy makes it unaffordable to a lot of people.
Fewer filing for bankruptcy
From 2007 to 2008, bankruptcy filings in-creased 33 percent, and it increased 32 percent from 2008 to 2009, according to Deseret News. A number of people wound up declaring personal bankruptcy between 2006 and 2008 because unemployment went up and the financial industry melted.
The increasing rate slowed quite a bit from 2009 to 2010 with only an 8 percent increase. There were 1.55 million filings for Chapter 11 and 7 bankruptcies during that year. In 2011, there were only 1.4 million filings, a 12 percent decrease, according to the New York Times.
A lot more people would most likely be declaring bankruptcy if they could afford to though, which makes the good data not almost as significant.
Not worth the money
The typical cost for filing Chapter 7 bankruptcy is $1,500, which means about 200,000 to 1 million individuals throughout the country cannot pay for to actually file for it, ac-cording to the National Agency of Economic Research. It is believed that many peo-ple use their tax returns to file bankruptcy.
When that $1,500 is split up, $1,000 will go to the lawyer, more than likely. About $85 will be spent on pre-bankruptcy counseling and educa-tion courses that are legally mandated for those declaring bankruptcy and another $300 will be put towards the mandatory court fee for filing.
A less costly way
Part of the expense involved is incurred by additional hoops to jump through and paperwork mandat-ed by the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, which has made declaring bankruptcy more difficult to do. Inexorably, that involves more legal work and thus more in legal charges. The law was passed to be able to reduce un-necessary or frivolous filings, but critics have contended the law puts bankruptcy further out of reach for the poor.
However, some attorneys are willing to work pro bono, or without being paid. There are pro bono associations through which one can find an attorney who may be willing to take a case. Some judges will also waive filing fees if a person's income is 150 per-cent or less of the federal poverty level.
Fewer filing for bankruptcy
From 2007 to 2008, bankruptcy filings in-creased 33 percent, and it increased 32 percent from 2008 to 2009, according to Deseret News. A number of people wound up declaring personal bankruptcy between 2006 and 2008 because unemployment went up and the financial industry melted.
The increasing rate slowed quite a bit from 2009 to 2010 with only an 8 percent increase. There were 1.55 million filings for Chapter 11 and 7 bankruptcies during that year. In 2011, there were only 1.4 million filings, a 12 percent decrease, according to the New York Times.
A lot more people would most likely be declaring bankruptcy if they could afford to though, which makes the good data not almost as significant.
Not worth the money
The typical cost for filing Chapter 7 bankruptcy is $1,500, which means about 200,000 to 1 million individuals throughout the country cannot pay for to actually file for it, ac-cording to the National Agency of Economic Research. It is believed that many peo-ple use their tax returns to file bankruptcy.
When that $1,500 is split up, $1,000 will go to the lawyer, more than likely. About $85 will be spent on pre-bankruptcy counseling and educa-tion courses that are legally mandated for those declaring bankruptcy and another $300 will be put towards the mandatory court fee for filing.
A less costly way
Part of the expense involved is incurred by additional hoops to jump through and paperwork mandat-ed by the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, which has made declaring bankruptcy more difficult to do. Inexorably, that involves more legal work and thus more in legal charges. The law was passed to be able to reduce un-necessary or frivolous filings, but critics have contended the law puts bankruptcy further out of reach for the poor.
However, some attorneys are willing to work pro bono, or without being paid. There are pro bono associations through which one can find an attorney who may be willing to take a case. Some judges will also waive filing fees if a person's income is 150 per-cent or less of the federal poverty level.
About the Author:
Are you in the midst of a bankruptcy problem and looking for somewhere to turn? Let the legal staff at SouthwellORourke.com help find you the best bankruptcy attorney Coeur d'Alene around.
No comments:
Post a Comment