Beware of Bottom of the Barrel Bankruptcy Filings

On the first business Monday of every year, employees of the family court order their morning coffee with an extra shot of espresso and head to work to find the biggest stack of new divorce filings that they will see all year.  While epic fights during the holidays are the impetus behind some of the Divorce Monday traffic, most of these beginning of the year filings are economically motivated; couples want a clean break between tax years, where they were married in 2023 but in the process of divorce in 2024.  The employees of bankruptcy court see a surge in filings right after tax season, as the people who have been putting their tax refunds toward debt repayment for the last few years and are no better off decide to use their tax refunds toward the cost of filing for bankruptcy protection.  Meanwhile, the nepo babies and the business-minded charlatans of the world sail in and out of bankruptcy court, gleefully racking up debts until they are eligible to file for bankruptcy again.  The ugly truth is that, as if with so many other things in life, filing for bankruptcy is harder the poorer you are.  Even if it stresses you out to think about how much it will cost to file for bankruptcy, the first step toward getting your debts discharged is to contact a Jupiter chapter 7 bankruptcy lawyer.

Don’t Pay Anyone Except a Bankruptcy Lawyer to Help You File for Bankruptcy

The cost of a bankruptcy filing is slightly more than $1,000 if you hire a lawyer and about $400 if you don’t.  Therefore, low-income applicants are more likely to represent themselves in bankruptcy court, even though they would get more debt relief if they hired lawyers.  Non-lawyer “petition preparers” advertise online, offering to help financially distressed consumers file for bankruptcy for a fraction of the cost of hiring a lawyer, but these businesses are as shady as the predatory lenders and for-profit credit repair services of the world.  Do not pay anyone to help you file a bankruptcy petition unless that person is a lawyer.  If you need advice but can’t hire a lawyer, go to a legal aid society or ask a family member or friend who has previously filed for bankruptcy.

Bankruptcy Lawyers Behaving Badly

In a research study that would make the authors of Freakonomics proud, Pro Publica reported that a higher percentage of bankruptcy cases are chapter 13 in states that have fewer legal protections for consumers, the same states where business to consumer lawsuits are rampant.  This is because chapter 13 cases do not bring immediate discharge of debts; the lawyers push their clients toward filing under chapter 13 to ensure that the bankruptcy court does not discharge the debts until after the lawyer gets paid.  To add insult to injury, the clients are sometimes unable to keep up with their chapter 13 repayment plans, so they get little debt relief from the bankruptcy filing.

Work With a Debt Lawyer About Bankruptcy Filings in Uncertain Times

A South Florida debt lawyer can help you if you do not think you can afford to hire a lawyer for your bankruptcy case.  Contact Nowack & Olson, PLLC in Jupiter, Florida to discuss your case.

Source:

propublica.org/article/when-you-cannot-afford-to-go-bankrupt