To start with, the cost of bankruptcy includes the lawyer fees, court filing costs, and any other extras the lawyer needs to charge, for example copies, or overnight packages to the court. when you first meet with your bankruptcy attorney, make sure you understand what those extra expenses are, and what are fees and what are the court costs.
After seeing that huge expenses, you might be inclined to find out where you can find a cheap bankruptcy option, or even if you can prepare a do it yourself bankruptcy. It's not likely you can find a discount on bankruptcy fees from lawyers, as the process is pretty paperwork intensive, and there is generally a rate that most lawyer will charge. So if someone offers to do it for you cheaply, you should be concerned about whether your paperwork will be done correctly and on time.
As for a do it yourself bankruptcy, it has never really been easy, since there is so much documentation to be done for each case. Lawyers have software programs that they can use to enter all your financial data and spit out the forms. When you are doing it yourself, you will have to type all the forms by hand, and know which form is which. The process also got a little more complicated after the bankruptcy laws changed in 2005. Now, you have other requirements, such as going to credit counseling prior to filing, that you need to be aware of. However, if you feel up to the challenge, there are some books on How to File for Chapter 7 Bankruptcy
which will help walk you through the process of filing bankruptcy yourself. However, there are other bankruptcy options which include not filing at all. Avoiding bankruptcy is the cheapest bankruptcy alternative there is! How do you decide when to file bankruptcy? Bankruptcy can help most when you have so many debts that your total debt is greater than your annual salary. For example, someone making $50,000 per year, who has $60,000 in debt, is going to have trouble paying that back. It's possible though if you get on payment plans with your creditors.
If you are employed, filing bankruptcy today is more likely to require that you file Chapter 13, which allows you to keep some property and pay your debts over three to five years. In other words, it's not a slam dunk that you will get all of your debt wiped clean. This could be a good thing if you are trying to keep your house out of foreclosure, for example. If you are likely to have to file Chapter 13, why not try to work with your creditors to create a debt repayment plan before you spend thousands on a bankruptcy lawyer?
If however you do not have a regular income, a bankruptcy Chapter 7 filing would allow you to discharge, or wipe away, most of your debt. Without income, though, you might also consider just not filing bankruptcy either, unless you have assets you want to try to protect. For example, if you have a car loan, and you file bankruptcy, unless you reaffirm that debt, or agree to pay, you will lose your car in bankruptcy. could you instead work out a revised payment plan with the lender? The same is true for your home; if you do not have the ability to pay the mortgage then either in Chapter 7 or Chapter 13, and can't work to refinance your mortgage, you may be forced to sell your house.
Finally, you want to consider your credit and bankruptcy. If you file bankruptcy, most lenders will consider that a very big red flag for many years to come. It stays on your credit report for 10 years. Unlike just past due accounts, bankruptcy is more serious, and even if your credit score rises, the mere fact that there is a bankruptcy on your record could lead many lenders to just turn you down for credit.
Keep in mind that most bankruptcy lawyers will meet with you in an initial meeting for free or low cost. You should talk with a professional before deciding what to do, and learn if you have any alternatives to bankruptcy that will not cost thousands of dollars.
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