Cost of BK

[boochase]

Had a chuckle today. Isn't ironic that those people filing BK are charged legal fees and court costs? None of us has any money and yet we are asked to come up with a few thousand dollars to make our debt go away. The courts should supply lawyers on a pro Bono contingency and waive court costs..most of us pay taxes.

[keepinitreal]

If you're still paying non-secured creditors, you can stop paying them and pay an attorney with that money. If you're not paying creditors and you still have no money for an attorney, that is a bad spot to be in. Maybe family would be willing to help?

[HHM]

PLEASE....the cost relative to the benefit is minuscule; there is NO other way to relieve debt with the degree of certainty that BK does and the cost is usually a single digit percentage of the debt you are discharging. Don't discount "value."

If you are eliminating $80,000 in debt and all you pay is $3,000, that is a deal of a lifetime;you are paying 3.75% of that debt. If you had to "settle" that debt with one of those sham debt settlement companies, you would pay (on average) $6,000 in fees ON TOP of the the amount needed to settle (about $30-40K).

As was pointed out, the reason you don't have money is because of the debt, once you stop paying an get your financial house in order, most people can come up with the fees in 2-5 months. It is really just a question of your commitment.

[NoTomatoCan]

The courts should supply lawyers on a pro Bono contingency and waive court costs..most of us pay taxes.

Not to argue a silly point, but...

Pro bono and contingency are two different things. An attorney generally does pro bono work for free or "for the public good". In a civil suit, an attorney can work contingency and gets a % of whatever the plaintiff recovers.

Under your proposal, what would be the proposed contingency that these lawyers would get paid for?

[LadyInTheRed]

Retainer paid to attorney: $1,500 (less than 2 months of payments on credit cards and 2nd mortgage)
Balance of base fee to be paid in plan: $2,300
Fee to strip 2nd mortgage to be paid in plan: $1,500
Total attorney fees: $5,300

Unsecured debt to be discharged: $30,000
2nd lien to be stripped and dicharged: $88,000
Total debt to be discharged: $118,000

The security of knowing that I have quality legal representation (even if not the cheapest) and the feeling I'll have in 5 years when I have no debt other than an affordable 1st mortgage: Priceless!

[blessed]

I'd gladly cough up $1200 to wipe out $32,000 of debt. Oh wait, I did. And an attorney is providing me a service, no way should he do it for free.

[Universal]

A good and knowledgeable attorney is more than worth the cost. Don't discount that at all. We all threw good money after bad in interest charges, etc., some of us for years. The cost for a good attorney is money well spent.

[boochase]

My post was meant to be sarcastic/ironic. I do not disagree with any of the comments. I was paying $450.00 a month for credit cards. For my retainer, I have already paid $500.00 and need to come up with another $1350.00 to file. The remaining $1500.00 will go into the plan. I am definitely wiping out $22000.00 of credit card debt. I would like to strip my second mortgage ($44,000.00 with $325 monthly payments), but my attorney said it is not possible because my wife is not filing with me. I showed her the Eastern Michigan case where the second was stripped with only one filer; she was pessimistic, for no cases in South Florida have included stripping in this situation. So far, I have only missed two $450.00 CC payments; so theoretically I have saved $900.00Here is my problem: I am underemployed, so we barely cover our expenses and our DMI is lower than the "assets test." Anyway, my comments were just suggesting sarcasm/irony ala Jonathan Swift.

[researchnerd]

If you are eliminating $80,000 in debt and all you pay is $3,000, that is a deal of a lifetime;you are paying 3.75% of that debt. If you had to "settle" that debt with one of those sham debt settlement companies, you would pay (on average) $6,000 in fees ON TOP of the the amount needed to settle (about $30-40K).

Absolutely agreed. However, it's not this black-and-white for everyone. If the trustee requires that you pay back 90% of your debt, plus trustee fees, attorney fees, and court costs, ultimately you could end up paying more than you owe. Settling with unsecured lenders on your own (I am not a fan of settlement companies) might be better in that situation.

I'm not discounting the value of Ch13 overall. It can save your home from foreclosure and your car from repo. Even if you end up paying 110% of your debt after all the fees, at least you know it is GONE in 3-5 years. Personally I think that peace of mind is priceless, but if I were young and single and didn't have a family, I might feel differently. It's completely dependent on a person's situation.

[smkrishna]

My post was meant to be sarcastic/ironic. I do not disagree with any of the comments. I was paying $450.00 a month for credit cards. For my retainer, I have already paid $500.00 and need to come up with another $1350.00 to file. The remaining $1500.00 will go into the plan. I am definitely wiping out $22000.00 of credit card debt. I would like to strip my second mortgage ($44,000.00 with $325 monthly payments), but my attorney said it is not possible because my wife is not filing with me. I showed her the Eastern Michigan case where the second was stripped with only one filer; she was pessimistic, for no cases in South Florida have included stripping in this situation. So far, I have only missed two $450.00 CC payments; so theoretically I have saved $900.00Here is my problem: I am underemployed, so we barely cover our expenses and our DMI is lower than the "assets test." Anyway, my comments were just suggesting sarcasm/irony ala Jonathan Swift.

BooChase, I am desperate to know about your attorney's conversation with you on Stripping the second loan with just one filer (not having your wife as a filer for Ch.13). I am planning to do the same thing. In fact, that's the reason for my bankruptcy. I am also from S.Florida. My attorney never said anything about this. Can you please be in detail about going for Ch.13 with the intent of stripping the 2nd loan on your primary (in my case its $126,000 with BofA) and C.Card Debts ($52,000) without my wife as a filer for Ch.13

I haven't yet filed Ch.13. I just stopped 2 credit cards (April) and HELOC this month. Planning to file Ch.13 in July or August. Expecting your or any expert's reply with detail...Please.

[NoTomatoCan]

I showed her the Eastern Michigan case where the second was stripped with only one filer; she was pessimistic, for no cases in South Florida have included stripping in this situation.

She was pessimistic because it isn't consistent with most BK law, and isn't even "good law" yet in SE Michigan. The case you refer to hasn't even gone to the appellate level yet (if the bank decides to appeal). It was the opinon of one judge that got written about because it was such a departure.

Maybe a judge in Florida that your BK gets assigned to adopts this line of reasoning, but I would not at all count on it. Heck, I wouldn't even count on it myself, and I am in SE Michigan where this decision took place!

SMKRISHNA - If stripping the 2nd without your wife filing is the reason for your BK, you should probably talk with an attorney personally about this soon, because this was a decision from a court of first impression in a totally different jurisdiction.

[smkrishna]

SMKRISHNA - If stripping the 2nd without your wife filing is the reason for your BK, you should probably talk with an attorney personally about this soon, because this was a decision from a court of first impression in a totally different jurisdiction.

NoTomatoCan, In my case, I am the only person in Mortgage and Note of Primary Loan and HELOC on my primary home. My wife didn't have SSN and she never had any source of income and so, only credit cards in her name and of course, in warranty deed as a spouse. Will this be advantage for me? Or it doesn't matter whether my spouse name is not on mortgage and deed. As you all know, Florida is not a community property state.