How to pay for bankruptcy when you’re broke in Georgia

How to pay for bankruptcy when you’re broke in Georgia

If you’re struggling under the weight of your debts and wondering if it’s time to consider filing bankruptcy, you’ll probably also wondering how you’re going to pay for it.

“Going broke” (e.g. filing bankruptcy) costs money, and somehow you’ve got to pay the court filing fees, pre-filing counseling fees, and most importantly your attorney fees.

How much will it cost to file bankruptcy in Atlanta, Georgia?
Both the court filing fee and pre-filing counseling fee are non-negotiable, but fortunately affordable. The court charges $299 to file Chapter 7 bankruptcy and $274 to file Chapter 13 bankruptcy. The court allows you to pay these off in installments of around $100/month. Pre-filing counseling is also affordable–it costs $30.

How much your attorney fee will be is a function of the complexity of your case and your attorney’s experience.

If you are my client, then my fee depends on a number of factors including but not limited to: the nature and complexity of your case, the risk I see in representing you, the number of creditors you have, whether you have existing and/or pending judgments, garnishments, repossessions and foreclosures, and what we plan to do with your property.You and I will talk a lot about your case and its complexity. You will understand why the fee is what I set it at when we are done talking. You will leave my office with a clear fee agreement that spells what services are included and excluded. You will sleep better with this information.

The Bad News–In Chapter 7, the attorney’s fee is paid before the case is filed
Attorney fees in Chapter 7 are paid up-front before your case is filed. This is not my doing. This is the rule of the court and the code. Yes, there are attorneys who advertise that they can get your Chapter 7 started with a down payment. I say that they are violating the law and risking their bar license. The law firm that advertises biggest filer of bankruptcy in Georgia is currently under investigation for this practice in Tennessee. The Department of Justice is seeking to disgorge over $1 million in fees from this firm because it filed chapter 7 cases with attorney fees paid post-filing.

The Good News–In Chapter 7, the attorney fee is affordable.
A Chapter 7 case is significantly less expensive than Chapter 13. Most clients discover that the total of their attorney fees in Chapter 7 is less than what they were shelling out in one month of minimum payments to Big Credit. This is especially true for clients who have credit card balances that carry 30% interest rates. Believe me.

The Great News–In Chapter 13, the attorney fee is paid is mostly through the plan.
Chapter 13 costs more because it involves a Chapter 13 plan and plan confirmation. But because the court views the plan confirmation as being an administrative cost of the case, paying your attorney ‘in plan’ is okay and is the way the court wants your attorney paid. That way there is an incentive for your attorney to get the case confirmed, and a disincentive for your attorney to file Chapter 13 cases that are Doomed To Fail

 

Now, how to Get the money to pay me.
You and I will discuss a few strategies:

  • Are you keeping your house? Your car? If not, then not having to make the monthly note payment will provide money to file.
  • Are you ‘in the chute’ to file bankruptcy and is there good reason to not make the monthly minimums on your credit cards (DON’T do this without being my client–There are risks you must know about!)
  • Is there a friend or family member who will give you the cash you need to file? You’d be surprised how many clients have their fees paid for by a loved one. (this can’t be a loan).
  • Are you about to get your tax refund? During refund season, most people who file bankruptcy did so with their refund. It’s money well spent.
  • Do you have an asset that you can sell at fair market value to an outsider to get your filing fee? This is very very tricky. (Please don’t sell your ’75 Cadillac, or your baseball card collection without me explaining to you how this transaction must be set up to avoid problems in court).
  • Is there a retirement accounts that you can tap? Please don’t plan to use your retirement accounts to bankroll bankruptcy. But on the other hand, if you’ve already liquidated the account you and I will consider this as a strategy. This is often the last resort.
  • Can you incur new credit card debt to pay your attorney? No. No you may not use credit cards to pay your attorney. Ask me about another Atlanta and Chicago based law firm who is currently being investigated and who will likely disgorge ALL attorney fees collected from credit cards since 2005.

Where there is a will there is a way. Where there is a calculator and a calendar, you’ll find me.

I’ve ‘shined the light’ for hundreds of Georgians who needed to figure out how to pay to go broke. Let me help you too.

Call me Attorney Shannon D. McDuffie for more information about getting (and paying for) your fresh start. (404) 418-8879.