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How much does it cost to file for bankruptcy in Cincinnati?

So you’re considering to file for bankruptcy, but the biggest concern you have is how much does it cost to file for bankruptcy in Cincinnati?  Well, there are generally three types of costs associated with filing for bankruptcy:

  1. Court costs.  The court filing fee for a Chapter 7 is currently $335.00.  For a Chapter 13, it costs $310.00.  These court filing fees are standard, but there are payment options.  The first option is to pay for the filing fee entirely up front.  The second option is to divide up the court filing fee into four monthly payments that are made directly to the bankruptcy court.  The last option is to request the bankruptcy court waive the court filing fees based off of your income and expenses.  Check with a Cincinnati Bankruptcy attorney to determine whether the court filing fees can be waived for your case.
  2. Attorney’s fees.  The attorney’s fees for Chapter 7 bankruptcy vary greatly depending on the complexity of your case.  The fees could be as low as around $600.00 for a simple case and upwards to $2,000.00 or more for a case involving a business owner.  Do not let the attorney’s fees determine who you select to be your bankruptcy attorney.  As the old saying goes, “you get what you pay for”.  If an attorney is charging very little, it could mean that he’s spending very little time working on your case.  The standard attorney’s fees for Chapter 13 bankruptcy are $3,500.00 in the Greater Cincinnati area.  That’s a lot more than a Chapter 7 bankruptcy, but Chapter 13 bankruptcy cases are more complex and require more time.  But there’s good news regarding attorney’s fees in Chapter 13 bankruptcy:  only a portion of the attorney’s fees are requested up front while the remaining balance is paid through the Chapter 13 plan.
  3. Administrative fees.  Whether you file for Chapter 7 or Chapter 13 bankruptcy, you will need to complete a pre-filing and post-filing credit counseling course.  These courses cost anywhere from $15.00 to $50.00.  Additionally, you should expect your bankruptcy attorney to obtain your credit report prior to filing the case.  The credit report fees can range from $33.00 to $63.00.

If you have more questions about the costs associated with filing for bankruptcy or if you’d like to discuss your case, please feel free to contact the Southard Law Firm at 513-441-7770 for a free consultation in Cincinnati.

Defaulted student loans and bankruptcy

Student loan debt is a major issue for recent graduates who are unemployed or underemployed in today’s economy.  In Ohio, 68% of college graduates leave school with an average student loan debt of $29,090.00 (statistics courtesy of projectonstudentdebt.org).  Student loan servicing companies offer several repayment plans, consolidation, deferment, and forbearance.  In addition, student loan borrowers can seek to have their student loans forgiven if they meet certain requirements such as working for the government or a nonprofit organization for 10 years while making payments towards their loans during that time period.  These are all good options that I encourage you to look into, but what about student loan borrowers who have defaulted on their student loans already?  There are options available.

First:  Contact your student loan servicer to see if they’re willing to allow you to start making payments again to bring your student loans out of default.  There may be fresh start programs that allow a student loan borrower to make payments during a probationary period.  Once that time ends, then the borrower could be allowed to use one of the options mentioned above.  BEWARE of third party companies offering student loan debt relief.  These companies charge high fees for options that you can do yourself by directly contacting the student loan servicer.

Second:  Discuss your student loans and financial situation with a bankruptcy attorney.  While the common consensus is that student loans are not dischargeable in bankruptcy, Chapter 13 is an invaluable tool that could bring your student loans out of default.  In a Chapter 13 bankruptcy, you make affordable monthly payments for 3 to 5 years based on your income and expenses.  The difference between your monthly income and expenses is your disposable income that funds your Chapter 13 plan and is used to pay your unsecured creditors such as student loans, credit cards, and medical debts.  Chapter 13 will allow you to repay on your student loans, bring the student loans out of default, and stop collection actions against you while in the Chapter 13 plan.  Any remaining unsecured debt will be discharged after your Chapter 13 plan is completed except for the remaining balance of your student loan.  At that time and without the burden of your other unsecured debt payments, you could enter into a repayment plan for your student loans that are now out of default.  The Chapter 13 plan payment will be a single, monthly payment that simplifies your financial situation.

To discharge student loans in a Chapter 7 Bankruptcy (or at the end of your Chapter 13 plan), you must successfully prove undue hardship.  The Sixth Circuit, which has jurisdiction over Michigan, Ohio, Kentucky, and Tennessee, has adopted the three part test in Brunner v. New York State Higher Education Services Corp., 831 F.2d 395 (2nd Cir. 1987) for determining what constitutes an undue hardship. See Barrett v. Educ. Credit Mgmt. Corp. (In re Barrett), 487 F.3d 353, 359 (6th Cir. 2007).

Under the Brunner test, a debtor must establish by a preponderance of the evidence:

1. that the debtor cannot maintain, based on current income and expenses, a “minimal”
standard of living… if forced to repay the loans;

2. that additional circumstances exist indicating that this state of affairs is likely to
persist for a significant portion of the repayment period of the student loans; and

3. that the debtor has made good faith efforts to repay the loans.

These burdens are difficult to meet and require an adversarial proceeding against the student loan company in bankruptcy court.  Although it is difficult, it is not impossible.  Whether your student loans are dischargeable in bankruptcy is something that you should discuss with a bankruptcy attorney.  If you meet the standard and can discharge your student loans, it would greatly alleviate your financial hardships.

If you have any questions, comments, or concerns, please feel free to post a comment or communicate directly to me.  As always, this information is not legal advice and acceptance of it does not constitute an attorney-client relationship.  If you wish to learn more about how bankruptcy could work for you, please contact me.

Welcome to Arthur J. Southard’s legal blog

Hello all!  I’m Cincinnati attorney, Arthur J. Southard, and welcome to my legal blog.  My practice areas are bankruptcy (Chapter 7 and Chapter 13), domestic relations (divorce, dissolution, and child custody), personal injury, and criminal defense.  I will be blogging on these areas of the law and I will be providing my opinion on legal aspects of current events.  Don’t hesitate to join in on the conversation by posting your own comments and questions.  If you have any ideas for subjects that you may like for me to blog about, please feel free to contact me.

I hope my blog can become an interesting resource for the general public and other legal professionals.  Please note, however, that this blog and website are for informational purposes only and do not constitute legal advice.  No attorney-client relationship is formed even if you post a comment or question.  If you wish to receive legal advice, please feel free to contact me directly so that we may discuss your legal matter in greater detail.

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