Today I spoke with a new client who was recently sued by a credit card company. She was distraught and in tears because, she said, she knew that she needs to file for bankruptcy but had no income or savings and could not afford to pay for a lawyer unless she was able to make payments. As I calmed her fears, I explained to her that you can pay for the cost of bankruptcy with a payment plan. Reputable lawyers typically offer flexible payment plans for people who need debt relief. Clearly finances are tight. Otherwise, you would not be seeking professional help. A compassionate attorney will understand that and will work with you toward the common goal of giving you a fresh financial start.
I Can’t Afford to File Bankruptcy
If you are under the pressure of overwhelming financial debt and need to file bankruptcy in San Diego, you may find yourself saying, “I can’t afford to file bankruptcy.” Flexible payment plans allow you to take action and get out of debt by making payments toward your case, instead of making the entire payment in one lump sum. Because debt relief lawyers are by definition working with people in financial trouble, it is only natural that they should have flexible payment plans to help you pay for legal costs.
What Is a Bankruptcy Payment Plan?
Just what is a bankruptcy payment plan and how does it work? It depends on whether you are filing under Chapter 7 or Chapter 13 . These are the most common types of bankruptcies filed by consumers, accounting for more than 99% of all bankruptcies. The other Chapters are for farmers and ranchers, or for large corporations.
Chapter 7 Payment Plan
If you are filing under Chapter 7, then your attorney can put you on a Chapter 7 payment plan where you make small payments each month. Once you get started on your Chapter 7 payment plan, you can tell all of your creditors to stop calling you and call your attorney. Your attorney can handle the phone calls so that you will no longer have to be afraid of your phone ringing.
While you are making payments on your Chapter 7 payment plan, your attorney can prepare your case so that once your payments are completed your bankruptcy can be filed immediately.
Chapter 13 Payment Plan
If you are filing under Chapter 13, then your Chapter 13 plan (your debt repayment plan in a Chapter 13 repayment proceeding) can include your legal fees. In this way, a Chapter 13 plan frequently serves the dual function of also being a payment plan. After preparing your Chapter 13 repayment plan, which typically repays home loan arrears and car loans, among other things, you can add the unpaid balance of your attorney’s fees to your plan payment that you make to the court appointed trustee each month.
Because a Chapter 13 repayment plan usually lasts 3-5 years, paying your payments through a Chapter 13 plan will result in a very small increase to your monthly plan payment.
So if you are worried that you can’t afford to file, don’t worry, you can pay for your legal costs with a payment plan. A bankruptcy payment plan can be tailored to your individual situation and budget, giving you an affordable solution so that you can exercise your legal rights when you need to get out of debt San Diego and get a fresh start.