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Many people do not contact bankruptcy attorneys because they believe they cannot afford to file for bankruptcy relief. Unfortunately, this bankruptcy myth keeps many people from obtaining the debt relief they need to overcome a financial hardship. Before you assume you cannot afford to file bankruptcy, keep reading. You might find that filing for Chapter 7 or Chapter 13 is much more affordable than you think.
Bankruptcy attorneys generally accept payments by cash, check, or debit card. However, they do not accept credit card payments. They don’t accept credit card payments because they do not want to help you commit fraud.
When you use your credit card with no intention of repaying the debt, you commit fraud against the credit card company. The credit card application you signed to obtain the credit card contains specific language regarding the repayment of debt. You promise to repay the amounts you charge to the credit card.
Therefore, using the card to intentionally pay for purchases or services with no intent to repay the amount is fraud. Law enforcement officials may prosecute you. Punishment includes fines and jail time.
Credit card debts fall into the category of unsecured debts. Filing bankruptcy discharges unsecured debts. A creditor cannot take any actions to collect discharged debts. Therefore, a bankruptcy attorney will not take a credit card as payment for attorneys’ fees or filing fees.
Bankruptcy attorney fees are based on many factors. Some factors that affect the amount a bankruptcy attorney charges include, but are not limited to:
Our bankruptcy attorney fee estimator (also below) helps you estimate how much bankruptcy attorneys in your area charge for filing bankruptcy. We can also help you find a bankruptcy attorney who offers free bankruptcy consultations.
You might think you could get away with using a cash advance to pay for your bankruptcy attorney fees. Who would know? Neither the credit card company nor the attorney knows what you did with that money.
Beware: the Bankruptcy Code addresses cash advances and charges for luxury items within 70 to 90 days of filing for bankruptcy relief.
If you use your credit card to purchase luxury items that total $725 within 90 days of filing a bankruptcy case, the debt might not be discharged. Likewise, if you take cash advances of more than $1,000 within 70 days of filing bankruptcy, your debt is presumed to be fraudulent.
Therefore, taking a cash advance to pay a bankruptcy attorney is not an option. The same would apply to taking a personal loan or payday advance. If you enter the loan agreement with the intent to file bankruptcy to avoid the debt, you commit fraud and the debt is presumed fraudulent if it falls within the timeline.
Many bankruptcy lawyers accept payments for their attorneys’ fees. They understand that their clients are going through a difficult financial experience. It may be impossible for a client to pay the entire attorney’s fee up front. Therefore, the attorney works out a payment plan for attorneys’ fees with the client.
In Chapter 13 cases, the attorney can include all or a portion of his fees in the Chapter 13 plan. Therefore, you may only pay the bankruptcy filing fee and a small amount of the attorneys’ fees to get the Chapter 13 case filed.
Chapter 7 cases are a bit different. There is not a repayment plan in Chapter 7. Therefore, you may need to pay all of the attorneys’ fees before the attorney files the Chapter 7 case. Other attorneys may file a Chapter 7 case and accept a payment plan that includes payments after the case is filed.
However, each attorney is different. Because they offer free consultations, you can meet with several attorneys before deciding which bankruptcy attorney to hire.
At Ascend, our goal is to help you find the debt relief option that works best for your situation. Most of our services are offered free of charge.
It costs you nothing to talk to one of our team members about our services. We provide free, personalized assistance to help you understand your finances.
Our team analyzes your financial situation, discusses the pro and cons of various debt-relief options, and provides payment estimates to get you out of debt. All free of charge. Call or contact us online today to begin your journey to becoming debt-free.
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