The epidemic of bankruptcies in the last few years has slowed down somewhat, as fewer people are declaring Chapter 7 or Chapter 11 protection. However, lots of people are not filing for bankruptcy because they cannot afford to do so.
Bankruptcy not as often
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 ended up filing for 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.
The optimistic data is not really all that good whenever you consider the people are not declaring bankruptcies because they just cannot afford to, according to CNN.
Not enough money to declare bankruptcy
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.
The $1,500 will mostly go to the attorney. The fee from the lawyer will add up to around $1,000 after considering the mandatory $300 federal court fee for filing. It also includes that many people will have to pay an average of $85 to pay for debtor's education courses and pre-bankruptcy counseling. This is needed for anyone who is declaring bankruptcy.
Making it cheaper
Declaring bankruptcy is much more difficult now that the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act have come out. This is why there are so many expenditures and paperwork needed to file. That means that someone has to pay a lawyer even more cash to do all the paperwork. It makes it more difficult for the poor to declare bankruptcy, although the law was meant to keep people from filing for bankruptcy without cause.
However, some attorneys are willing to work pro bono, or without getting paid. There are pro bono associations through which one can find an attorney who might be willing to take a case. Some judges will even waive filing fees if a person's income is 150 per-cent or less of the federal poverty level.
Bankruptcy not as often
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 ended up filing for 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.
The optimistic data is not really all that good whenever you consider the people are not declaring bankruptcies because they just cannot afford to, according to CNN.
Not enough money to declare bankruptcy
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.
The $1,500 will mostly go to the attorney. The fee from the lawyer will add up to around $1,000 after considering the mandatory $300 federal court fee for filing. It also includes that many people will have to pay an average of $85 to pay for debtor's education courses and pre-bankruptcy counseling. This is needed for anyone who is declaring bankruptcy.
Making it cheaper
Declaring bankruptcy is much more difficult now that the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act have come out. This is why there are so many expenditures and paperwork needed to file. That means that someone has to pay a lawyer even more cash to do all the paperwork. It makes it more difficult for the poor to declare bankruptcy, although the law was meant to keep people from filing for bankruptcy without cause.
However, some attorneys are willing to work pro bono, or without getting paid. There are pro bono associations through which one can find an attorney who might be willing to take a case. Some judges will even waive filing fees if a person's income is 150 per-cent or less of the federal poverty level.
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