How Much Does It Cost to File for Bankruptcy?

bankruptcy

People only file for bankruptcy because they are having a hard time paying off their debts. It seems to add insult to injury, then, when these individuals in financial hardship learn that it is not free to file. There are many expenses associated with filing for bankruptcy, including filing fees, court fees, credit counseling fees, and attorney fees. While some of these expenses are fixed, meaning everyone pays the same cost, there are others that you have more control over. How much your bankruptcy ends up costing you will depend on the factors outlined below.

Filing Fees

The filing fees you pay in association with your bankruptcy will depend on the type of bankruptcy you are filing. A Chapter 7 bankruptcy will discharge most of your debts, so you are no longer responsible for paying them. You’ll also lose assets in the process. A Chapter 13 bankruptcy will create a repayment plan so you can pay back your creditors in three to five years. You typically don’t lose any assets when filing this type of bankruptcy.

The current filing fees set by the United States Court for filing for bankruptcy are $335 to file a Chapter 7 bankruptcy and $310 to file a Chapter 13 bankruptcy. These are the filing fees for everyone. If anyone tells you they can file your bankruptcy for less than these amounts, they are not credible and you should stop working with them right away.

While all bankruptcy cases will incur these fees, there are instances that can increase your cost when filing. For example, there’s an additional fee for converting a Chapter 13 bankruptcy into a Chapter 7 bankruptcy, which is sometimes required when a repayment plan cannot be created.

Waiving the Fees and Installments

Typically the filing fees are due at the time you file for bankruptcy. However, there are options for those that can’t afford to pay them. A judge may allow you to pay the fee in installments, breaking up the expense into payments that are smaller and more manageable. You can also ask the courts to waive the fee but must meet strict requirements in order to do so. You must show that you are under great financial hardship and cannot pay the fees, even through an installment plan. You must also show that your income is less than 150 percent of the poverty line.

Cost of Credit Counseling

Anyone who files for bankruptcy must undergo a credit counseling session. The facilitator of that session must be approved by the court. You’re also required to take a financial management course. This course must also be approved by the court.

The reasoning for these courses and counseling sessions is to better prepare you to handle your finances once your bankruptcy is over. Sometimes, people file for bankruptcy and don’t change their habits. In a few short years, they find themselves in the same position and consider once again filing for bankruptcy. The courts don’t want you to live a life of bankruptcy, and they also realize that every time you file, creditors go unpaid. As such, they mandate these courses to try and prevent that from happening.

The fees of these courses and counseling sessions vary from provider to provider. However, they don’t usually cost more than $100. Certain providers in Florida even offer them for under $25. These courses can be taken online and don’t typically take very long to complete, meaning they won’t hold up your bankruptcy.

Attorney Fees

There is simply no way to tell how much anyone will pay in attorneys’ fees, as these vary widely around the state of Florida. An attorney could charge as little as $1,000 to handle the case from beginning to end. Others could charge as much as $3,500 for the same services.

Although attorneys’ fees vary, most lawyers will charge more for a Chapter 13 case than a Chapter 7 bankruptcy. This is because there is much more involved with a Chapter 13 bankruptcy, so there is more work for the attorney. These cases could cost anywhere between $2,500 to $6,000.

After hearing of these attorneys’ fees, many people think it’s a better option to simply file for bankruptcy on their own. This, however, is a mistake. The judges and court employees are not allowed to provide you with legal advice, which means you’ll have no way of knowing if the creditors are acting appropriately or fairly, or if your rights are being upheld. You’ll also have to take on all the legwork and paperwork, which is sometimes monumental in bankruptcy cases.

Just as the cost of filing for bankruptcy shouldn’t prevent you from getting the financial help you need, the cost of an attorney should not prevent you from working with one. It’s also important to remember that an attorney’s price doesn’t necessarily reflect the knowledge or experience of the attorney. There are some very good lawyers that charge very minimal amounts for bankruptcy cases. There are also others that charge high amounts but don’t provide their clients with the attention they need during a difficult time.

It’s not the time to comparison shop when you are speaking with an attorney. It’s more important that they will explain your options in a language you can understand, and that they have the experience necessary to get you the best possible outcome. Of course, the attorney you choose should also largely be based on your own personal feelings about an attorney. You’ll hand over a lot of sensitive information; you want to be comfortable with the person you’re handing it to.

Need Help with Your Bankruptcy Case? Call Our Florida Bankruptcy Attorneys

If you’re considering filing for bankruptcy, you should not do it on your own. At Loan Lawyers, we are the Fort Lauderdale bankruptcy attorneys who can help. We will advise on which type of bankruptcy is right for you, speak to creditors on your behalf, and take care of all the other details involved in these cases. Call us today at (954) 523-HELP (4357) for your free consultation so we can start reviewing your case.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.