How Much Does It Cost to File Bankruptcy?

The price of filing for any type of bankruptcy is divided into 2 catagories: actual costs and attorneys fees. Actual costs are the out of pocket expenses that you or your attorney must pay to file your particular case. In all consumer chapter 7 cases, there are essentially 3 costs: $306 that must be paid to the court (the filing fee), the cost of attending the pre-bankruptcy counseling class and the post-bankruptcy debtor education class (usually between 60 to $100 total) and the cost of downloading your credit report information (usually around $50). Based on the providers we use, the current out-of-pocket cost for filing a chapter 7 case with our firm is $401 for an individual and slightly more for a couple. The cost for a Chapter 13 is slightly less, because the court filing fee for a chapter 13 is $281 (a savings of $25). if you are filing without an attorney, it may be possible for you to have some or all of these costs waived by the court.

Attorneys Fees vary widely based upon the experience and quality of the attorney and the complexity of the case. In this market, consumer cases are usually handled on a “flat fee”. That is the attorney will charge a set amount for consulting with you, preparing your case and appearing in court. Under existing case law, this fee must be paid to the attorney prior to filing your case. Once the case is filed and you receive a discharge, the fee is uncollectable. In a simple, individual consumer chapter 7 case, the flat fee is typically set to cover about 3-4 hours of attorney time (around $900 to $1600). However, the more complicated a case is, the higher the fee will be. Also, if problems come up in a case that has been filed (perhaps a creditor challenges the case, or undisclosed assets are discovered) additional fees would most likely be incurred at the attorney’s hourly rate. This why it is so important to disclose everything to your attorney to make sure there are no surprises after the case is filed! Attorney fees in a chapter 13 bankruptcy are typically higher than in a chapter 7. In this jurisdiction, total chapter 13 fees typically run around $4000 to $5000. However, in a chapter 13, you make payments to the bankruptcy trustee over a 3 to 5 year period (which payments are used by the trustee to pay a portion of your debt). Most attorneys accept some of their fees through this payment plan. For example, in a fairly straight forward consumer chapter 13, you may put down $1500 in attorneys fees, and the attorney would then collect the balance of $2500 through your bankruptcy payments to the trustee. Again. the more complicated a case, the higher the fees. People that are self employed can expect to pay more for a bankruptcy, as can people that have assets to protect or income issues. And if a person or business doesn’t qualify for chapter 7 or 13, Chapter 11 bankrutpcy is a possibility. Because of the complex nature of a chapter 11 case, the fees (and costs) are much, much higher. But that is beyond the scope of this article.