Many homeowners do not know the cost of filing bankruptcy and they declare bankruptcy without thinking the consequences that can happen. The financial condition of people is such that they are not able to pay the installments of their loans with the lenders and hence are taking this step towards bankruptcy. Due to loss of job, loss in business, non payment of credit card funds and heavy debts they declare bankruptcy without knowing the hidden cost involved. It is advised that you first read on to be aware of the hidden cost involved in the process before you plan anything.
You may think that you will be relieved of all your debt after the process completes and will start everything with a new plan and direction. But wait, cost of filing bankruptcy can leave you with much more debt on your head.
1. For filing your case, you will have to appoint a professional counselor who would examine your case and prepare the file for you to declare bankruptcy. This may sound easy but the fees charged by these professionals is very high and just think for yourself, that from where would you get all this money?
2. Now there is a fee for lawyer who would take care of your case with your lender. Now this man is practicing for many years and would not grant you his services to declare insolvency for free. So, here’s another hidden cost involved.
3. Thirdly, the court will also charge some fees for filing of the case and if by chance you wish to make any alterations in the file then there is another hidden cost, which you may be aware of in the beginning when you plan to declare bankruptcy.
4. The fourth and the biggest hidden cost of filing insolvency is the amount that you in the future. Bankruptcy stay in your credit records for 7 years, but generally it is never erased from your records and in future you will have to face embarrassment and denial on the application of any credit facility that you apply for.
The hidden cost involved to declare insolvency will leave you with extra debt and it is advised that you take each step carefully.