The cost of bankruptcy
The cost of filing bankruptcy has kept up with the economy and the demand for filing services, though it is not bankruptcy legal services alone that total up the cost of bankruptcy. There are a few other factors when considering bankruptcy, that the filer needs to think about before proceeding. To summarize the basic list of costs, they are legal fees, filing fees and counseling fees. Other fees like amendment fees would apply if you had to make changes to your petition after submitting it, or conversion fees if you decide to file chapter 7 bankruptcy after having submitted your petition for chapter 13.
Bankruptcy Legal Fees
Legal fees may be the bulk of bankruptcy costs, these fees can range anywhere from $400 to $1700 depending on where you are in the country. The cost of filing personal bankruptcy has in fact gone up in the last couple of years, mostly due to the changes in bankruptcy laws, that made it more difficult for individuals to qualify for a bankruptcy discharge while also requiring more paperwork to be filed by bankruptcy attorneys. Many attorneys and law firms understand that their clients are dealing with a lot of debt and may not be able to handle the legal fees all at once. So they have made it easier for filers to take advantage of payment plans.
Bankruptcy Filing Fees
When filing for bankruptcy it would be wise to hire an experienced bankruptcy attorney, as they would be best to calculate your total bankruptcy costs as they apply to the court’s fees. As of January 2007 the bankruptcy court filing fees are $299 for chapter 7 bankruptcy and $274 for chapter 13. There are other costs such as:
- Registration of Judgment - $39
- Notice of removal - $250
Conversion Fees
- Chapter 11 to Chapter 7 - $15
- Chapter 12 to Chapter 7 - $60
- Chapter 13 to Chapter 7 - $25
- Chapter 7 to Chapter 11 - $755
- Chapter 12 to Chapter 11 - $800
- Chapter 12 to Chapter 13 - $35
- Chapter 13 to Chapter 11 - $765
Amendment Fees
- Schedules D, E and F - $26
- Amendment to list of creditors - $26
Counseling fees
The basic costs of filing for bankruptcy end with the counseling fees. These are the fees you must pay to receive the mandatory counseling that the new bankruptcy laws require all filers to take prior to getting a discharge. The costs of bankruptcy counseling are rather moderate. Visit the U.S. trustee’s site for a list of approved credit counseling agencies, this portal lists the agencies by state and typically the costs are anywhere between $20 to $40 dollars. The first part of the counseling should be done prior to submitting your bankruptcy petition and the second part prior to getting a discharge.
So the overall bankruptcy costs can certainly add up and make the process more complicated for you if you don’t have the disposable income to pay for it all at once. Your bankruptcy attorney’s fees may be negotiable, or at the very least they may allow you to make installments on their total fees. However the bankruptcy court’s fees will not be negotiable these must be paid in full at the time of filing.
