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The average cost of bankruptcy is between $1,500 and $4,000 when combining fees both the court and the attorney. Read on to learn more.

The Cost Of Bankruptcy

There is not a simple answer. While the court fees are established set fees, the cost of an attorney can differ of many factors such as who you choose to hire, your location and whether your case is simple or complicated.

Filing Fees

Chapter 7 Total Filing Fees: $335

• Filing fee: $245
• Administrative fee: $75
• Trustee Surcharge: $15
• Re-opening a Chapter 7 filing: $260

This is not an actual quote. If you need an experienced bankruptcy lawyer contact Canterbury Law Group to start your initial consultation.

Chapter 13 Total Filing Fees: $310

• Filing fee: $310
• Administrative fee: $75
• Re-opening a Chapter 7 filing: $235

Using data collected by the American Bankruptcy Institute between 2005 and 2009 shoed $1,072 to be the average price of a Chapter 7 bankruptcy with assets. Prices varied primarily by location. The high end was $1,530 in Arizona all the way down to just less than half ($781) in some states. The same study states that for a Chapter 12 bankruptcy the average cost was $2,564. North Dakota had the lowest costs at $1,560 all the way up to $4,950 in Maine.

With such price variance, let’s look at some of the reasons for this:

• Some of your debts are  non-dischargeable debts such as unpaid taxes, alimony, child support and student loans
• You have varied income sources
• You exceed your state’s median income threshold for your household size
• Trying to prevent a legal action such as a foreclosure filing against your property, a bank levy or loan that served as collateral for a current debt
• A bankruptcy filing in the previous eight years
• Having many individual creditors
• Filing for both a personal and business bankruptcy
• When you face accusations of fraud that may be proven correct.

In cases of Chapter 7 bankruptcy is standard practice for attorneys to insist on payment before services are rendered. Payment plans may be an option, but they will not go forward unless payment has been forthcoming. This means additional vulnerability to creditors as you try to obtain the money for the fees going to your attorney.

Attorney Costs In Your Area

It is very likely fees may have increased since the study we quoted. In Chapter 12 bankruptcy cases, the attorney’s fees will be reviewed by the judge unless they fall beneath what is a baseline in the state when the case is being foiled. You can meet with several attorneys and their fees are public record and can be accessed through the federal PACER website. There is a small charge for this service, but it may save you a great deal of money!

Generally, in larger cities and metropolitan areas the charges will be greater because the general cost of living will be higher in those communities. Also, lawyers with many years of experience in this field are far more likely to charge more than those with lesser experience. Also, think about how complicated your case is. If your case is a simple one, a less expensive lawyer may work out fine, however the more complex the issues are, the more experienced a lawyer you will want to have on your side. This would also apply if one major reason for your bankruptcy is medical debt.

Education Courses

There is a 450 fee for the two credit counseling courses you must undertake if you are filing for either Chapter 7 or Chapter 13 bankruptcy. A nonprofit credit counseling agency must be the ones to hold the course and the Office of the U.S. Trustee sets the fees that top out at $50 and go all the way down to free, depending on your circumstances. The course may be taken online or in person.

Saving Money On Costs

Obviously, some cases of bankruptcy are more burned with debts that are unmanageable than others. Either way it is essential to fully document your entire financial situation before you approach a bankruptcy attorney. You may be able to obtain a fee reduction if you are elderly, disabled or a low-wage earner. An attorney can help on these areas as well as us there are other mitigating factors that are relevant, an attorney may be willing to discuss lowering their fees.

Remember in Chapter 7 bankruptcy cases, attorneys will want their fees paid upfront and in Chapter 13, they usually demand a set amount of the fee to start with and will obtain the rest through the bankruptcy plan the court orders.

Consider how long it takes to recover from bankruptcy. In the case of Chapter 7 bankruptcy, although it may be a success, it may be up to ten years before it disappears from your credit report. It is true that Chapter 13 bankruptcy may do less damage, but it involves sticking resolutely to a payment plan for a period of three to five years, even if the court does help by reducing the amount of your debts.

There is always the option of filing the bankruptcy yourself however there may be some considerable consequences for doing so. If you do run into trouble or forms are filled out incorrectly or in error, your case may be dismissed and that will generate additional expense as well as having to start over once more.

Paying For Bankruptcy

You will also need to consider how you are going to pay for your bankruptcy. Legal fees are often a headache to deal with, but you will also face court costs as well as the fee for the statutory credit counseling. You may be looking at a total bill of several thousands of dollars when all is said and done.

Other avenue for obtaining the needed money include:

• You may wish to put a temporary hold on credit card repayments and sell off some household assets for cash to raise the fees.
• If you earn less than 150% of the poverty income level for your state you may qualify for reduced or a pro bono legal assistance or help from the Legal Aid Society.
• Find a bankruptcy lawyer who will work with you on a pro bono basis but some of the law firms they represent will insist on between ten and fifteen percent being on a pro bono basis.
• File under Chapter 13 instead of Chapter 7. As lawyers can incorporate their fees into your repayment plan.

Source: “How Much Does It Cost to File Bankruptcy: Filing Fees and Attorney Fees.” Debt.org, 11 Feb. 2020, www.debt.org/bankruptcy/cost/.

The path of Chapter 7 bankruptcy is well-established and should progress without unforeseen difficulties. Read on to learn more about what is involved with our overview of the procedures to follow.

Debt Analysis

Remember some debts cannot be discharged in Chapter 7 bankruptcy such as child support obligations, the majority of student loan balances, recent tax debt and child support obligations. If collateral has been pledged for a debt, if you are not current when you file for bankruptcy, the creditor may take the property, if you are not current following your case.

Property Exemptions Determinations

Every state has certain exemption laws statin the property types you can keep under Chapter 7 bankruptcy, For example, the majority of people can keep their retirement accounts, house furnishings, a reasonable car and some equity in a home. You will want to ensure what you can protect prior to filing.

Eligibility

The majority of people must take and pass a means test before they can qualify for a debt discharge in Chapter 7 bankruptcy (Some individuals include people whose debt is primarily from a business as well as some personnel from the military.) When your gross income is more than the median income for a family of your given size in the state where you reside – you may not qualify. If it is less, you will. Should you not qualify, toy will take the expenses allowed from the income to decide whether you will be permitted to utilize Chapter 7 bankruptcy.

Redeeming Or Reaffirming Secured Debts

If you want to keep a property you have pledged collateral on for a loan, you will need to keep paying the creditor if you wish to retain the property. When filing for bankruptcy you will decide if you want to redeem the property (by paying off the creditor is a lump sum payment) or reaffirm the property – usually meaning you agree to continue paying the creditor under the current terms. A third option can be to surrender the property, allowing the creditor to take it. If you live in certain areas, there may be other options available as rules do differ from state to state.

Filling Out Bankruptcy Forms

Although you will have to fill out forms that are several dozen pages in length – the yare important because they tell the court about your debts, property, expenses, incomes and previous transactions. You will also list your creditors as well as your property exemptions and make decisions regarding any secured debts you have. Lastly, you will disclose any property transactions occurring in the previous ten years prior to your bankruptcy case.

Credit Counseling Course

A credit counseling course is mandatory for individuals wanting to file for bankruptcy. Very occasionally it may be done, shortly after filing for bankruptcy.

Filing The Forms

Your case gets officially under way when you file your petition. The majority of people file all the forms at once, but if time is of the essence there is an option for emergency filing.

Filing Fees And Fee Waiver Requests

When you file the necessary forms, you will pay a fee for filing. You may request the court to split the payments into quarters if you cannot afford the filing fees up front. If you cannot pay at all, you will need to apply for a waiver of fees by filling out the fee waiver application and presenting it with your bankruptcy petition. A judge will then make a determination but the income or your household may not exceed 150 percent of the federal poverty guidelines.

Document Submission

The bankruptcy trustee will require documents that show evidence of the information you supplied in the bankruptcy filing forms. Expect to send along paycheck stubs, tax returns, bank statements, profit and loss statements,

Meeting Time

Usually you will only need to attend a single meeting at the court with a trustee. The trustee will verify your identification and will ask the standard questions that are needed to be answered by all debtors as well as specific questions relevant to your case. It is possible a creditor or two or more, may appear but this is not usually the case.

Filing of Objections And/Or Motions

If you want to dispute acclaim from a creditor or you are seeking the elimination of certain liens – you will need to tackle these matters before the closure of your bankruptcy case. However, if you overlook a lien, the majority of courts will allow you to revisit the case at a later time.

Winding Up Secured Debts

In your bankruptcy forms you explained how you would handle debts that have been secured. These matters will have to be addressed before your case can be closed. For example, if you promised to return a car to your lender you have to make sure said car is available.

Debtor Education Course

Once paperwork has been filed you will need to complete a debtor education course before your discharge can be obtained. You will not get a discharge if you fail to file the certification showing you have completed this course. This may become a major expense as you will likely have to a file another motion as well as an additional filing fee so the case can be reopened.

Discharge

When a successful bankruptcy has been completed the court will issue an order that will discharge all of your debts that qualify. Once this happens, you no longer are under a legal obligation to pay the debt and the there is no legal approaches the creditor can make to obtain payment.

Source: O’Neill, Cara. “Filing a Chapter 7 Bankruptcy: Basic Steps.” Www.nolo.com, Nolo, 12 Nov. 2014, www.nolo.com/legal-encyclopedia/chapter-7-bankruptcy-29454.html.