Cost of Bankruptcy
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What Is the Real Cost of Bankruptcy?
When you are facing bankruptcy, you are at a point where you can no longer manage your debts. Nevertheless, bankruptcy will cost you additional money in order to rid your looming financial obligations. In addition to the costs outlined below, you should also consider the cost of hiring a bankruptcy lawyer, as well the initial cost of filling for bankruptcy.
- Chapter 7: For a Chapter 7 bankruptcy case, the filing fee is $335.
- Chapter 13: For a Chapter 13 bankruptcy case, the filing fee is $310.
The Bankruptcy Trustee may also charge a fee of up to $20 when you file. You may request to pay the filing fees in installments if you can show the court that it would be a financial hardship to pay it all at once.
What Is the Cost of Attorney Fees in a Bankruptcy Case?
As of October 2014, depending on the type of bankruptcy you are seeking, the filing fees cost anywhere between $310 and $335. This is merely the payment to the bankruptcy court and does not include any fees you pay to your attorney. If you are considering in hiring an attorney to file a bankruptcy petition and represent you in the case, you need to know how much each attorney will typically charge in order to represent you in court.
If you want to file for Chapter 7 bankruptcy, most attorneys will base their fees on how complicated and complex your case is and what other attorneys in the area would charge for a similar bankruptcy. If you have a lot of property or your income is higher than the state median, you will typically have to pay more in attorney fees than an unemployed person with no property. In addition, larger and bigger firms may charge you more for a bankruptcy case than a solo practitioner.
If you are filing a Chapter 13 bankruptcy case, most courts have guideline fees that attorneys can charge for a Chapter 13 case. In these situations, attorneys cannot charge more than the set court fees that are stated in the guidelines. Chapter 13 guideline fees are different for each judicial district. The fees are typically between $2,500 and $6,000 depending on whether you are an employee or have your own business. One advantage about Chapter 13 bankruptcy cases is that you don’t have to pay all attorney fees upfront.
Waivers of Bankruptcy Fees
In most cases, the bankruptcy courts require you to pay the filing fees up front. But for some special circumstances, you may pay the fee in installments or have it waived. For either of those, you must apply for it.
To qualify for a waiver under Chapter 7 bankruptcy, you must not have enough money to pay in installments and you must be below 150% of the poverty line.
As for Chapter 13 bankruptcies, waivers are rarely given. As a general rule, attorney fees for Chapter 13 bankruptcies cannot be paid until the filing fee is paid. Thus, it is almost impossible to obtain a waiver as most people chose to use a bankruptcy lawyer when going through the process.
Consulting an Attorney
Though contrary to common sense, paying a bankruptcy lawyer will help you reduce your liability in the long run. Bankruptcy law is a very complex field, and any errors will result in dire consequences. A lawyer will reduce your anxiety by doing all the work for you, will attempt to reduce your liability, and will have your best interest in mind.
Consult a Lawyer - Present Your Case Now!
Last Modified: 08-25-2015 04:03 PM PDT
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