The cost of bankruptcy consists of two things: the cost to go through the bankruptcy process and the long term side-effects to your credit history.

Most people go through two types of bankruptcies: Chapter 7 and Chapter 13. There are many other Chapters, but these two are the most common. In Low Cost Bankruptcy Service I explain the fees that you’ll have to pay in order to go through the court proceedings. In short, these are the filing costs and your lawyer fees, of which the lawyer fees are the most costly. Lawyer fees can range anywhere from $500-$2,500 (usually its on the higher end of this range). Although you may want to represent yourself, bankruptcy involves a lot of technicalities, which lawyers have extensive knowledge of. If the lawyer helps you start the bankruptcy process, you’ll have a much easier time paying the lawyer fees because bankruptcy (especially with Chapter 7), will make things a lot easier on your wallet.

Aside from the initial cost of bankruptcy, there are long-term costs, which you’re going to have to pay for, in the form of higher interest rates. The fact that you went through bankruptcy stays on your credit report for 10 years. Keep in mind that just because this scar stays with you for 10 years, it doesn’t mean that you can’t start getting normal interest rates much sooner. Although you’ll see really high interest rates right after your bankruptcy case is closed, you can start getting normal interest rates within several years, provided you’ve built up your credit score. You can easily build up your credit score by getting a credit card and using it sparingly, not maxing out on it and not missing any payments. The whole point of using a credit card after bankruptcy is not so much for the convenience that people use it for (the 30% interest rate you’ll receive isn’t convenient!), but to tell your lenders that you are a responsible borrower.  Right after you are done with the bankruptcy process you can still get loans, mortgages, and credit cards, just at a ridiculously high-interest rate, this is the long term cost of bankruptcy (three years or so). 

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