It’s a bit of a catch-22. You’re out of money; but now in order to declare bankruptcy, you need money.
This blog and our ebook has a chapter that discusses alternatives to bankruptcy. The bankruptcy process is a process held almost entirely in the courts. To add fuel to the fire, anything surrounding other people’s money and disputes about that is going to make anything in court longer, more expensive, and more complicated.
You have all these ingredients.
The bankruptcy process is a paper jungle. Your lawyer is your guide. They must be paid to guide you through, take care of the threats, and handle the toughest challenges. Once you get to the other side of this paper jungle, your debts are now discharged. It may be worth it.
Given the fact that you are not able to pay back people that have provided services for you without charging upfront, do not be surprised that a bankruptcy lawyer will charge you up front.
So how much does it cost? Obviously, simple bankruptcies cost less. Contentious, large, dispute ridden bankruptcies cost significantly more.
Here is what to expect.
A very simple, straight forward Chapter 7 business bankruptcy may cost $1,000-5,000 in attorney fees.
Chapter 7s with likely disputes or complications or simple re-org Chapter 11s can run between $10,000-$25,000
If you are a large business, expect to pay $25,000-$50,000. Very large companies will be looking towards $100,000.