How Much Does It Cost To File For Bankruptcy?
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.
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.
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/.
Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale
Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business Bankruptcy, Chapter 7 Bankruptcy, Creditor Representation, Chapter 5 Claims, Chapter 13 Bankruptcy, Business Restructuring, Chapter 11 Bankruptcy, and more.
*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.