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Is the cost of bankruptcy preventing Georgians from filing? Atlanta, GA

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Is the cost of bankruptcy preventing Georgians from filing?

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When someone makes the difficult decision to file for Chapter 7 or Chapter 13 bankruptcy, they are likely at the end of their financial rope, drowning in debt with little available income to pay their bills. However, when that person begins the bankruptcy process, he or she will likely be met with the unfortunate truth: bankruptcy is expensive.

On average, according to the National Bureau of Economic Research, an average Chapter 7 bankruptcy filing costs upwards of $1,500. As a result, it is estimated that between 200,000 and one million people in Georgia and throughout the country are unable to afford that cost and file for bankruptcy every year. Another 200,000 people who would have otherwise been unable to file will reportedly use their income tax return to do so this year.

This means that, in general, the people who are unable to afford the costs of bankruptcy are those that need it the most. Bankruptcy became more expensive with the passage of the 2005 Bankruptcy Abuse Prevention and Consumer Act, which aimed to prevent bankruptcy fraud by making it more difficult to file.

Since the act went into effect, the bankruptcy rate has fallen only slightly. However, the average income of bankruptcy filers has increased, indicating that people with lower incomes – arguably, the people who need bankruptcy protection the most – are filing at lower rates than people in the middle class.

So what goes into bankruptcy that makes it cost so much? To start, federal courts charge $300 to file a bankruptcy petition. If filers have a household income below 150% of the federal poverty level, they may be able to have those fees waived. However, that is a low threshold that few are able to meet.

Source: CNN Money, “Too broke to go bankrupt,” Blake Ellis, May 7, 2012

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Based on 28 reviews

Jack L.

They did an excellent job with my case. Jamie took the time to really listen and understand things. She delved into the details and was extremely knowledgeable and non judgmental. Very professional and they know what they are doing. Would definitely recommend!

All C.

Mr. Gingold was recommended by an attorney I had worked with previously. I met with Ira Gingold to discuss credit issues. He went over each specific issue thoroughly. He advised me of the potential outcomes. He did all this in one meeting for a very reasonable price. When we finished I was confident in moving forward with a resolution. He definitely wants to help people take the appropriate course of action for their circumstance.

Karen B.

Dear Mr Gingold, There are so many reasons to be thankful for all you have done and will do. Anyone who has ever had unfavorable experiences with an attorney or the legal system will feel the trepidation that I experienced once I realized that my situation seemed hopeless. It was by chance and happily good luck that I decided to put my future and sanity into your hands. I was mortified at having to deal with my debts by claiming bankruptcy. I remember in our first meeting how you assured me that I was not alone and should not feel ashamed. And, anyone in this position obviously does not have money to spare and you were clear about all the costs and allowing me to pay according to my own ability to do so. You advised me in all aspects of the law, but also, you were at each meeting incredibly supportive and complementary of my personal and professional plans. Anyone else in this situation should feel blessed to have access to your expertise and support.

Lyla B.

I thought the process of filing bankruptcy was going to be a difficult one. However, Gingold & Gingold treated me with respect and dignity from the moment I walked through their door. I had the pleasure of working with Jamie. She is very responsive, professional, and knowledgeable. She took the time and listened to my every concern and handled each and every one of them to my satisfaction. My experience with filing bankruptcy under Gingold & Gingold's representation exceeded my expectations in a major way. They gave me such a peace of mind. I am very pleased with my decision of going with Gingold & Gingold to represent me when I filed Chapter 13 bankruptcy.

Julie T.

Wow! I am finally out of debt and can say that I am debt free after completing my chapter 7 bankruptcy case with Gingold and Gingold. Mr dangled was very knowledgeable and direct with regard to my debt situation. there were no surprises and the case went as I was advised. The staff was also very helpful whenever I had a question. I will definitely recommend them in the future to my friends.

Sherard W.

I cannot say enough about this law firm. From the initial consultation to our discharge, the entire office kept me updated with every step of the entire process. I came to the Gingold after a bad experience with another law firm. Ira and Jamie immediately began treating me like family through this experience. In the end, they assisted with eliminating many debts including my 2nd mortgage. I cannot say enough about the experience and knowledge that Ira brought to the table from the office visits to the court time. Thank you very much for helping me through this tough time. Thank you.

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