Guide to Bankruptcy Filing Expenses and Costs
This comprehensive guide explains the costs associated with filing for bankruptcy, including application fees, attorney charges, and additional expenses. It covers both Chapter 7 and Chapter 13, highlighting fee waivers, installment options, and mandatory education courses. Understanding these costs helps individuals make informed financial decisions during bankruptcy proceedings.
Filing for bankruptcy offers a path to financial relief for individuals and businesses overwhelmed by debt. The court fees remain consistent regardless of case specifics, but other expenses can vary based on case complexity, location, and attorney fees. Here's an overview of typical costs involved in bankruptcy proceedings.
Chapter 7 Bankruptcy
Designed for those unable to settle debts, Chapter 7 involves an application fee of approximately $300.
Fee waivers and payment plans are available for qualifying individuals, especially those below 150% of the federal poverty line. Requests for installment payments must be completed within 120 days post-filing. The court may also grant a fee waiver based on financial hardship.
Attorney Fees
Attorney charges vary depending on case details such as unsecured debt and property holdings. Fees generally range from $1,000 to $1,500, payable upfront or through installments. Many lawyers accept installment payments, especially considering the automatic stay prevents creditors from pursuing collection actions during proceedings.
Chapter 13 Bankruptcy
Helpful for individuals with steady income, Chapter 13 involves creating a structured repayment plan. The filing fee is around $300, with no fee waiver options available. Payment can be made in installments, and attorney fees are typically incorporated into the repayment plan, often higher due to the case's complexity and duration.
Educational Courses
Both chapters require completion of credit counseling before filing and debtor education afterward. These courses, available online or in-person, cost approximately $50 each, and are essential in helping individuals manage finances post-bankruptcy.
Additional Expenses
Other factors influencing bankruptcy costs include multiple income sources, numerous assets, creditor count, past bankruptcy filings within 6-8 years, accusations of fraud, or related legal actions like eviction or bank levies. These elements can impact approval chances and total expenses.
