It’s probably safe to say that if you’re contemplating bankruptcy, you’re drowning in debt. Many people are caught in a jam though. Because of their insolvency, they’re unable to pay for the filing fees, an attorney, and the other related fees to have an opportunity to get discharged in bankruptcy. Across the country, there is no set pricing formula for either a Chapter 7 bankruptcy or Chapter 13 bankruptcy. So, how much does it cost to file bankruptcy with an attorney?
How Much Does it Cost to File Bankruptcy with an Attorney?
Bankruptcy Petition Filing Fees
All bankruptcies in the United States are heard in the U.S. Bankruptcy Court. The good news about that is the filing fees for a bankruptcy case are uniform across the country.
For a Chapter 7 case, the cost is a flat fee of $335. For Chapter 13 cases, the cost is also a flat fee of $310. Although an incidental cost, credit counseling and financial management course fees are required. Those should run between $50 and $100 apiece.
Fees for a Bankruptcy Lawyer
It’s never recommended that you represent yourself pro se in any legal action. Any bankruptcy case can get complicated very quickly. Without a quality bankruptcy attorney, your case could get stalled or even dismissed.
That’s why retaining a quality bankruptcy lawyer is strongly recommended. A dedicated and experienced bankruptcy lawyer will anticipate any possible problems that will cost even more money to resolve.
On average, attorney fees for a Chapter 7 case will range between $1,000 to $3,500, depending on where you live and the experience of the attorney representing you.
For a Chapter 13 case, attorney fees can average between $3,000 and $6000. It’s up to the bankruptcy lawyer who you retain as to whether all or part of the attorney fees are payable in installments. Although bankruptcy courts have the authority to determine whether there are excessive attorney’s fees in a case, they generally don’t scrutinize them.
An attractive price doesn’t mean that you’ll obtain quality legal services. Beware of high-volume bankruptcy law firms that seem to advertise everywhere.
Attorneys in these law firms are notorious for not even knowing who their client is until the day of court. It’s the law firm’s office support staff that does all of the work. You’ll want a dedicated and experienced Chapter 7 or Chapter 13 attorney who pays close attention to detail.
Types of Bankruptcy
Chapter 7 Bankruptcy
In a Chapter 7 bankruptcy case, the court sells the debtor’s non-exempt assets. The proceeds of the sale of those assets are used to pay creditors. Their interests are prioritized under the U.S. Bankruptcy Code. Many creditors walk away with little or nothing, and the debtor is discharged in bankruptcy.
This type of bankruptcy is known as liquidation or straight bankruptcy. Aside from being discharged, another attractive feature of a Chapter 7 case is the fact that upon making the initial filing, an automatic stay is ordered and a debtor’s creditors are required to cease and desist from all but a few collection efforts.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy known as a wage earner’s plan. It allows a debtor with a regular job an opportunity to create a plan for purposes of paying part or all of their debts. If that plan is accepted by the bankruptcy court, the debtor will be allowed to make installment payments to the court over a period of three to five years.
A Chapter 13 bankruptcy is a consolidation plan, and creditors are paid from the monthly payments. Like a Chapter 7 bankruptcy, a Chapter 13 bankruptcy has its own advantages. Two of those are that a debtor might be able to save their home and car from creditors.
Frequently Asked Questions
How Can I File a Bankruptcy Case if I Don’t Have any Money?
Even though you might not have any money, there are ways of finding the funds to file for bankruptcy. If you have a tax refund coming, it’s likely more than enough to get you through a Chapter 7.
You can also stop paying your unsecured creditors like credit card companies. The money that you save in doing so should be enough to get a case started in a few months.
You can also seek help from your family and friends. You might be surprised by how supportive your network can be as take important steps to re-establishing your financial health.
Once you have gathered the required funds, speak with a respected bankruptcy lawyer about a retainer agreement. Some bankruptcy lawyers will agree to take payments and escrow them until costs and attorney fees are covered.
Can I Get a Free Lawyer for a Bankruptcy?
Your local bar association might have a list of attorneys who occasionally work pro bono. You might also look for legal clinics or legal aid societies in your area. Some bankruptcy courts even maintain legal clinics for purposes of assisting bankruptcy petitioners file on their own. If no such clinic is available, your local bankruptcy court might offer a list of free services or programs that might be able to help you.
Can I Waive the Bankruptcy Filing Fee?
Based on an eligibility determination, you might be able to have your filing fee for your bankruptcy petition waived. This solution is only available in Chapter 7 cases.
You’ll be required to show the court that you’re completely unable to pay that fee though. You’ll need to complete Form 103B to seek an appropriate waiver. The completed form can be a part of your bankruptcy filing. Then, you might be required to attend a court hearing and be questioned by a judge as to why you want the filing fee waived.
If your Form 104B is denied, your judge could give you four months to pay the filing fee in. If it isn’t paid, your case might be dismissed.
Can I File for Bankruptcy Pro Se?
The law allows you to represent yourself pro se in a bankruptcy proceeding, but there are many pitfalls to doing so. You’ll have an extremely difficult time if there are objections by creditors, dealing with exemptions, reaffirmation agreements or other complicated details.
Can I File for Chapter 7 Multiple Times?
Be forewarned that if you file a Chapter 7 case and it’s dismissed, you can file again, but it’s unlikely that you’ll get the full protection of the U.S. Bankruptcy Code again. Repeat filers don’t get the automatic Chapter 7 stay. On that basis, creditors are still able to pursue what is owed to them while your case is pending, including lawsuits for collection and garnishments.
An experienced and dedicated bankruptcy lawyer will be prepared for any legal issues that might arise during the course of your bankruptcy. The chances of something going wrong with your bankruptcy case will drastically diminish.
That’s why a seasoned bankruptcy attorney will charge more than somebody who just passed the bar exam and is working for a bankruptcy mill. While a cheap bankruptcy mill might look appealing, you might end up paying for their mistakes in the long run.
Elena Steers is a highly experienced bankruptcy attorney, the founder of Law Offices of Steers & Associates, and previously worked as a Bankruptcy Trustee Assistant at the Office of the Chapter 13 Trustee in Los Angeles. Her current affiliations include the State Bar of California, National Association of Consumer Bankruptcy Attorneys, and Central District Consumer Bankruptcy Attorneys Association.