Cost of Bankruptcy Too High and Rising, American Consumers Seeking Bankruptcy Cheap for Chapter 7


    The State of Excessive Legal fees & Unaffordability of Cost in Bankruptcy Today

    Today, the tattered state of personal bankruptcy in America could simply be summed up as follows:

    • The cost of bankruptcy is too high and still rising, and hence American consumers clamor for and seek cheap bankruptcy

    • Bankruptcy filings are nearly back to the near record levels of almost 2 million filed in the pre-2005 law era when a new law, the so-called BAPCPA law, that was supposedly going to curb “abuse” of the system and reverse the then skyrocketing rate of bankruptcy filings, took effect. The estimate is that the filings for the just-concluded 2010 year, could reach 1.7 million – even when nobody is yet to show or find that these debtors have particularly been filing out of any ‘”abuse” or cheating on their par.

    • Bankruptcy is fundamentally supposed to provide a “fresh start” to people who are in serious financial distress. Yet, even at a time when there’s a record high demand by debtors to file bankruptcy, there is today a growing number of Americans who need the protection and are qualified to file, but cannot simply because the cost of bankruptcy is too high largely because of the lawyers’ fees, and what they really need is cheap bankruptcy,.
    • In the 2008 year, some 1.1 million (1,064,000) American debtors filed for bankruptcy. But even as far back as that time, NEARLY AS MANY AMERICAN DEBTORS as filed for bankruptcy, wanted to file for bankruptcy and were eligible, but could not, because they simply couldn’t AFFORD the lawyers’ legal fees. These were debtors who Justin Harelik, a bankruptcy lawyer with Price Law in Los Angeles, called the “unofficially bankrupt debtors” – debtors who were all but bankrupt but only lacked the lawyers’ hefty price to make their status official
    • Today at the beginning of 2011, we are in the strange new era of what some have dubbed “too broke to afford bankruptcy” or “too poor to go bankrupt.” Only a tiny fraction of debtors in serious financial distress who are qualified to file bankruptcy, according to a January 2010 study by Katherine Porter, associate professor of law at the University of Iowa, and Ronald Mann, a professor of law at Columbia University, titled “Saving up for Bankruptcy,” are filing for it. Some experts have put that figure at up to 50% or more. “It’s shocking that we are back to the 2005 level,” says Professor Katherine Porter. “And the filing rate doesn’t even begin to count the depth of the financial pain.”
    • Because they simply can’t afford the cost of bankruptcy, instead of seeking the protection of bankruptcy, many debt-laden Americans have been forced to go into a “shadow economy,” or informal bankruptcy, according to some experts.
    • As the financial problems of this large number of Americans who legitimately qualify for bankruptcy but can’t afford it, worsen, that hurts EVERYONE, the debtors and non debtors alike, because it can hinder the economic turnaround nationally. For the debtor, for example, such postponement in filing is not good for his financial situation It’s similar to delaying going to the doctor, says Robert Lawless, professor of law at University of Illinois, because he’ll just end up with more problems.
    • A sizable and growing number of debtors – 1 out of every 9 debtors who file for bankruptcy, according to a recent survey by Prof. Bob Lawless of the University of Illinois Law School – finding there’s no other way they can get bankruptcy cheap, or to afford the lawyers’ fees for it, are now recorded to be filing for bankruptcy pro se or without using a lawyer.
    • According to one study by the U.S. Government Accountability Office, for example, in just the first two years alone after the law changed, the attorney fees for filing Chapter 7 bankruptcy rose from $712 to $1,078, and on top of that the court filing fees increased from $209 to $299.

    Stephen Elias, a California attorney and bankruptcy specialist and author of several books on the subject:

    “Surveys have shown that many attorneys have doubled their fees to cope with new requirements imposed by the BAPCPA of 2005. Many thousands of debtors have therefore been priced out of lawyer representation in their bankruptcies…The only legal alternative to attorney representation is self- representation… bankruptcy petition preparers can assist with your paperwork.”

    Another observer, Jenny C. McCune, a contributing editor at, noted: “We’ve now come to the point where a debtor may have to finance bankruptcy filing… It may sound like a Catch-22… you have no money so you’re filing for bankruptcy, but you need [legal fee] money so you can file for bankruptcy.”


    Clearly, the average American debtor who unfortunately is experiencing the sorry “too poor to afford bankruptcy” syndrome in today’s national economic era, if he (or she) is, as he rightfully should, to be exercising his nonnegotiable Constitutional right to bankruptcy, needs to have, and MUST by whatever proper means be provided, a low-cost, cheap bankruptcy that’s an affordable alternative bankruptcy system to today’s lawyers-only and lawyer-dominated high fees system. And yet, just as clearly, debtors need to be able to afford bankruptcy without lawyers, or with lawyers. Now, could that mean, perhaps, having a system of filing bankruptcy with no bankruptcy attorney involvement – to assure it will be low-cost bankruptcy and affordable? Yes, maybe. At times, when the circumstances warrant that to make it practicable for a debtor to be able to exercise or enjoy that fundamental citizenship right. Consumers simply MUST have far lower, and affordable cost of bankruptcy

    To tackle this huge problem of high cost of bankruptcy, a growing number of consumers today are gravitating to another alternative, a low-cost and affordable option, however. Namely, the use of a specialized non-attorney assistance by, say, a competent Debt Relief Agency or Bankruptcy Paper Preparer, to do their own bankruptcy.

    These special non-attorney helpers in the trade (at least the better ones among them), are usually well-trained and experienced paralegals specialized in bankruptcy document preparation and procedures, but offer their services to debtors at far lower and more AFFORDABLE cost. And hence, it’s not surprising that more and more debtors today use this option and File Bankruptcy Without Using Attorney, as they seek to get bankruptcy cheap and Cheap Attorney Fees


    (For a recent account of how consumers a increasingly becoming too poor to file bankruptcy, see: ).

    Wish to join the growing army of financially hard-pressed bankruptcy seekers across America today who seem to have found lately that they could just as well do their bankruptcy pro se without using a lawyer, and are increasingly availing themselves of competent “non attorney” assistance and services to get their bankruptcy filing done at costs that are low, low, and affordable to them? Get some pointers on where and how to readily do so here.

    Source by Benjamin Anosike, PhD