americans too broke to file for bankruptcy
Last Updated : GMT 13:14:30
Arab Today, arab today
Arab Today, arab today

Americans too broke to file for bankruptcy

Arab Today, arab today

Arab Today, arab today Americans too broke to file for bankruptcy

Washington - Arabstoday

This year, hundreds of thousands of Americans are expected to be too broke to file for bankruptcy. The average cost to file for Chapter 7 bankruptcy protection, the most common form of consumer bankruptcy, is more than $1,500, according to recent research submitted to the National Bureau of Economic Research.Americans: Too broke to go bankrupt. As a result, anywhere between 200,000 and one million consumers are estimated to be unable to afford that steep cost this year. The research, conducted by a group of professors from Columbia University, the University of Chicago and Washington University in St. Louis, examined how bankruptcy filings spiked after people received their tax rebates in previous years. They estimate that another 200,000 consumers, who would otherwise not have enough money to file, will use their tax refunds to pay for bankruptcy this year. \"For lots of people, bankruptcy has been taken off the table as an option because of the severe fees involved,\" said Jialan Wang, co-author of the report. Among those fees is a charge of about $300 just for filing the paperwork with the federal court, while the rest typically goes to bankruptcy lawyers, said Wang. And there are other expenses on top of that, including fees for mandatory pre-bankruptcy credit counseling and a pre-discharge debtor education course. These average about $85 altogether, according to a recent study sponsored by the American Bankruptcy Institute. That means many of the Americans who have seen their debt snowball out of control due to events like job loss, foreclosure or a medical emergency during the economic downturn are now left without their last financial lifeline, she said. Extreme debtors \"It becomes harder and harder to pay off the debt as interest payments get higher, so your debt grows larger and larger,\" she said. The cost of filing for bankruptcy has risen in recent years as a result of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, which aimed to reduce the number of bankruptcies taking place by adding more requirements to the filing process -- including additional paperwork and the credit counseling and debtor education. While the bankruptcy rate has fallen slightly since the law took effect -- from a rate of 1.4% in 2004 to 1.3% last year -- the average income of bankruptcy filers has increased, the NBER study found. The findings indicate that the new requirements are pricing out many of the consumers who are least able to afford the fees, said Wang. \"It ends up being the relatively better off, or middle-class consumers who can actually afford to file, and the people with lower incomes can\'t afford to file,\" said Wang. Billy Brewer, president of the National Association of Consumer Bankruptcy Attorneys, said bankruptcy attorneys have no choice but to charge such high fees. \"When clients come in and I tell them the fee, they look at me like I have two heads, and say: What part of \'I\'m filing for bankruptcy don\'t you understand?\' But we can\'t afford to do it for free,\" said Brewer, who charges an average fee of $1,500. \"Congress decided to make the process much more difficult and there\'s much more paperwork involved, so attorneys are spending double the time they used to just to help someone file.\" Those who can\'t afford the fees should still try to find a pro bono lawyer willing to provide legal services for free, said Wang. However, only a small fraction of people are actually able to get this kind of help. And think twice before you decide to go it alone, said Gerri Detweiler, director of consumer education for Credit.com. \"It\'s too complicated now, and too much of a minefield. Make a mistake and your case is dismissed,\" she said. \"A dismissed bankruptcy hurts your credit just as badly as one you complete. So you have all the downside without the fresh start.\" Ditching debt She also warns against low-cost document preparation services claiming to help consumers fill out necessary documents. It\'s easy for consumers to think they\'re getting sound legal advice even though the preparers aren\'t lawyers, she said. Among the various types of bankruptcy protection, Chapter 7 is the most common. Chapter 7 enables you to wipe out some or all of your debt in the shortest amount of time, said Detweiler. Bankruptcy doesn\'t relieve you of certain debts, however, like student loans or alimony payments. If you\'re filing Chapter 7 bankruptcy, you can request to have the $300 court fee waived. The judge will typically grant a waiver if your income is less than 150% of the poverty line and you can prove that you are unable to pay the fee in full or in installments. $34,000 in debt, wants to start a business However, it\'s the attorney fees that are the biggest expense. If you have been making some payments on your debts, an attorney may advise you to stop paying creditors, which can free up the money you need to pay the attorney\'s fees. But if you haven\'t had enough money to make any payments to creditors, Detweiler recommends asking friends or family members for help. If that doesn\'t work, you could sell some of your belongings or get a second job, as long as your attorney says that it wouldn\'t affect your ability to receive bankruptcy protection. Brewer, of the National Association of Consumer Bankruptcy Attorneys, said sometimes it\'s just a matter of rearranging priorities. \"If the need is crucial enough, consumers usually find a way to come up with the money,\" he said.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

americans too broke to file for bankruptcy americans too broke to file for bankruptcy

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

americans too broke to file for bankruptcy americans too broke to file for bankruptcy

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today Air China suspends flights to North Korea

GMT 10:39 2017 Thursday ,23 November

Air China suspends flights to North Korea
Arab Today, arab today Sophian Yussef reveals suitable decoration

GMT 02:56 2017 Thursday ,23 November

Sophian Yussef reveals suitable decoration
Arab Today, arab today Syria opposition meets in Riyadh

GMT 06:23 2017 Thursday ,23 November

Syria opposition meets in Riyadh
Arab Today, arab today Online exhibit shows hidden depths of

GMT 11:45 2017 Thursday ,23 November

Online exhibit shows hidden depths of
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today Srebrenica women cry tears of joy

GMT 08:03 2017 Thursday ,23 November

Srebrenica women cry tears of joy
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today 'Robo-taxis' hold promise, and perils

GMT 08:07 2017 Thursday ,23 November

'Robo-taxis' hold promise, and perils
Arab Today, arab today Honda recalls 800,000 minivans

GMT 11:43 2017 Wednesday ,22 November

Honda recalls 800,000 minivans
Arab Today, arab today Singer Jahda Wahba has unlimited ambitions

GMT 07:56 2017 Monday ,20 November

Singer Jahda Wahba has unlimited ambitions
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 09:23 2017 Saturday ,18 November

Fedra happy for “Between Two Worlds” success

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts

GMT 10:43 2017 Wednesday ,22 November

Cigar-shaped asteroid came

GMT 09:45 2017 Tuesday ,21 November

Visit Jamaica for more than just sun

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday