In the past few years I’ve noticed a disturbing new trend in the Eastern District of Missouri. In an attempt to gain more clients, some law firms are offering to file cases for as little as $313.00. How can these firms operate when the filing fee for a Chapter 13 bankruptcy is $313.00? They don’t make money on these cases. Or do they?

Some firms have opted to guide every debtor into a Chapter 13. The good news is the client receives bankruptcy protection as soon as their case is filed. The bad news? They can end up paying $4,800.00 in attorney fees! The flat fee authorized by the Eastern District of Missouri Bankruptcy Court is $4,800.00 per Chapter 13 case. If you choose one of these bargain-price firms to handle your bankruptcy, you may end up paying four or five times as much as you would have paid for a Chapter 7. Even worse, by staying in a Chapter 13 Bankruptcy for three to five years, you risk losing tax refunds every year. If you become entitled to an inheritance while you are in a Chapter 13 you could lose that as well. Personal injury claims? Workers’ compensation claims? These claims could be lost as well.

Are you looking for a fresh start? Your Chapter 13 can last up to five years. You cannot incur any debt during that period without the Court’s approval. This means that you’ll be unable to rebuild your credit while you are in the Chapter 13 bankruptcy. Chapter 13 can offer great relief, but it isn’t the best option for everyone.

Some of these firms promise to convert your case after a set amount of money is paid. This could take a year or longer and still leaves you open to losing tax refunds or other claims. In my view, the entire process is abusive and should leave the Debtor and the Debtor’s attorney subject to sanctions from the bankruptcy court.

Make sure you speak with a respectable attorney that will do what is in your best interest. Yes, a Chapter 7 may cost a little more upfront, but in the long run it can save you a lot of money and let you restart your life much sooner. Remember, your attorney works for you. You shouldn’t be working for your attorney. If you allow an attorney to guide you into an unnecessary Chapter 13, you’ll be working to pay that attorney for the next three to five years.

For further information regarding Chapter 7 Bankruptcy or Chapter 13 Bankruptcy please call me at 314-802-8328.