Bankruptcy is sometimes the only means for thousands of Americans to escape debt. In fact, 250 people file here in Northwest Louisiana a month. According to a recent article from Lawyers.com, more and more Americans are finding they can't afford to file for bankruptcy.
"I'd say a large majority of people will never make an appointment for bankruptcy because they think they're going to have to walk in and hand a lawyer a big stack of money," bankruptcy lawyer Laban Levy said. While fees are required to file for bankruptcy, he says sometimes the cost can be deferred.
"Everybody has different jobs, everybody has different financial situations, living arrangements, economic arrangements," Levy said.
People, he says, should decide what kind of bankruptcy to file based on those differences. Chapter 7 bankruptcy demands cost up to $1,500 to be paid up front. Levy says filing for Chapter 13 bankruptcy is easier.
"That is sometimes preferable to people who need immediate relief but don't have the ability to raise the thousand dollars or the fifteen hundred dollars," he said.
Levy says most people choose Chapter 13 because most lawyers will then defer their fees.
"You can retain, usually, all of your assets and propose a payment plan that allows you to pay based on only what you can afford," he said.
People can have court fees deferred under both chapters if they qualify.
"Our court actually allows people to pay court costs in installments if they can demonstrate a need to do so," Levy said.
Levy says the most important thing to remember is that bankruptcy laws are written to help different people in different situations. He says certain credit counseling organizations will waive their fees and sometimes courts will as well.