The answer is yes. It does not make much sense that you have no money and still have to pay to go bankrupt.
Indeed, there is. It may seem counterintuitive that you’re required to pay for bankruptcy when your financial situation is dire. However, a Licensed Insolvency Trustee, like any other professional, incurs costs such as rent, staff salaries, and other operating expenses. In some instances, you may need to surrender certain assets to your trustee for liquidation. The proceeds from this liquidation could then cover the trustee’s costs.
In the majority of cases, the individual filing for bankruptcy is responsible for the costs involved. These costs, which typically amount to around $1,800, cover the trustee’s fee, court filing fee, counselling fees, among other expenses.
For those whose income is exceptionally limited, arrangements can sometimes be made to pay these fees over a duration of time without incurring any interest. This should be discussed with the trustee during the initial consultation. Conversely, those with a higher income are expected to contribute a part of their surplus income towards their creditors for the duration of their bankruptcy. This period typically lasts 21 months for a first-time bankruptcy filer with surplus income. The usual duration of a first-time bankruptcy is 9 months, but this is extended to 21 months when surplus income is involved.
Contact Rumanek & Company. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.
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