admin on February 26th, 2009
If you are thinking of filing for bankruptcy get a free bankruptcy review, or file yourself with our bankruptcy forms for just $19.95. Thanks for visiting!
The new bankruptcy laws have increased the cost to file bankruptcy due to the additional work attorneys, and those filing bankruptcy have to do in order to complete the bankruptcy petition, and have it accepted by the courts. Below you will find a breakdown of all the costs associated with filing bankruptcy.
Pre-Bankruptcy Credit Counseling - As we detailed in our post on the requirements of bankruptcy credit counseling and personal financial management course, every filer must complete a credit counseling course within 180 days before filing bankruptcy. The course fee varies depending on the location, but the average cost is about $40.
Bankruptcy Petition Preparation - The Federal Bankruptcy Code allows bankruptcy filers to choose to prepare their bankruptcy petition themselves, hire an attorney, or hire a non-attorney bankruptcy petition preparer (NABPP). If you plan on filing bankruptcy by yourself you will have to buy the official bankruptcy forms ($19.95), find free bankruptcy forms online ($0), or buy bankruptcy software that will help walk you through the process ($49.95). These costs are minimal, but if you are at all uncomfortable with completing your bankruptcy petition by yourself, you will likely want to hire an attorney.
For a Chapter 7 bankruptcy, the average cost for an attorney is $1500, and for Chapter 13 bankruptcy the average cost is now around $3500 due to the extensive paperwork and background checks that are needed to complete the bankruptcy petition. In some circumstances your attorney costs can be included in the bankruptcy filing, so it’s important to get all your options. If you are knowledgable about bankruptcy law but want a professionally prepared petition you can hire a NABPP. The average cost of an NABPP is $150 as it is typically set by each state, but some bankruptcy districts are extremely hard on filers who use NABPP’s as they view them as taking business from attorney’s and may give you a hard time about your petition, even if everything is correct.
Bankruptcy Petition Filing Costs - Once your petition is prepared, there are court filing fees that must be submitted when you file your forms. There are options for pay in installments, and other options, but we won’t discuss those here. The filing costs for bankruptcy petitions are $299 for a Ch 7 and $274 for a Ch 13.
Personal Financial Management Course - After your bankruptcy petition is filed you have one more fee to go. Once your forms are accepted you will get a notice in the mail that you need to complete the personal financial management course. Just like the credit counseling course, the cost will vary depending on the location of the course but the average cost is around $30.
Total Cost To File Bankruptcy - If you complete everything yourself you can file bankruptcy for as low as $369, and if you use a bankruptcy attorney, filing bankruptcy can cost you upwards of $3869 or more.
admin on January 9th, 2009
Expert financial analysts predict the world’s corporate earnings will continue to decline for a least the first half of 2009. Several financial management houses rated various industries and believe that Standard & Poor’s 500 will experience a 9% decrease in its earnings by mid year. Several top brands and companies have declared bankruptcy in 2008 and bankruptcy law firms are seeing an increase corporate demand for bankruptcy contingency consulting.
The energy and retail industries are expected to the hardest hit in 2009, with profits expected to decline by more than 20%. As a result of these industry losses the European and Asia markets will be driven further into an economic recession, titling this economic period the first time Europe, Japan and the US have simultaneously been in an economic recession since World War II.
admin on December 16th, 2008
Companies considering bankruptcy are preemptively filing for Chapter 11 protection because of the difficulty of securing a debtor in possession (DIP) loan. The nation’s financial crisis has made once plentiful credit extensions a thing of the past.
Generally while a company is in bankruptcy, a DIP loan is made while reorganization of the company takes places. Financially strapped companies facing the lack of credit extensions and already over-collateralized assets are filing for bankruptcy before their cash reserves are completely exhausted. Many corporations in Chapter 11 bankruptcy are turning to hedge funds, pension plans and other less traditional money sources for DIP loans. The nation’s corporations have undergone a financing frenzy over the past few years and have reached an unprecedented level of debt. With no assets or cash, corporations could face liquidation in a bankruptcy proceeding. Companies are taking note to jump ahead of the rush and preemptively file bankruptcy as a strategy for the inevitable future, as financial experts predict another wave of financial stress for the nation next year.
admin on December 13th, 2008
In the month of November, foreclosure auction filings were in a decline across the US. Many experts say this is the calm before another tidal wave of filings to hit after the holiday season. Mortgage default activity has increased by an average of 5 per cent each month over the last two years; however, the number of homes going to foreclosure auction decreased in November.
Weeks prior to the Thanksgiving holiday, Fannie Mae and Freddie Mac agreed to suspend foreclosures until after the holiday season. Fannie Mae and Freddie Mac hold just over 50 percent of the active mortgages in the US. In addition, bankruptcy filings, which temporarily stop the foreclosure process and the efforts of more banks to perform a loan modification has aided in the delay of foreclosure auction filings. Economist believe that as much as 30 percent of the $2.3 trillion of adjustable rate mortgages are expected to begin adjusting in 2010, and that the worst of the foreclosure crisis is far from over, proposing the current foreclosure decline is a result of lenders reactions to the holiday season.
admin on December 13th, 2008
Holiday shopping for kids just got a little less exciting as famed toy retailer, KB Toys, has filed for Chapter 11 bankruptcy. KB Toys was started in 1922 and grew over the years to become one of the largest toy retailers in the US. The toy retailer has decided to begin closing all of its stores and liquidating its assets to satisfy it liabilities. The company filed bankruptcy in 2004, but emerged out of the filing after it was purchased by a capital management firm. However, the dramatic drop in consumer spending as a result of the heightening economic crisis has hampered its attempt to profitably operate.
In the period from October to December this year, KB Toys revenues fell 20 percent from the same period 12 month earlier. The affects of this bankruptcy will close all 460 of its stores and afterwards release it over 10,000 employees. KB Toys bankruptcy filing reported debts in the range of $100 – 500 million with asset holdings falling in the same range.
