The total cost of a bankruptcy depends upon several factors, including the kind of bankruptcy you file. You generally need to pay filing fees, attorney fees, and credit counseling fees.
The Bankruptcy Court charges a filing fee that is set by Congress. The most recent revision of the fee schedule took effect on November 21, 2012.
- Chapter 7 bankruptcy.
The filing fee for a chapter 7 “liquidation” bankruptcy is $306. You can ask the Bankruptcy Court for permission to pay that fee in installments over a period of four months.
If an application to pay the filing fee in installments is presented with the chapter 7 petition, the court will accept the petition for filing without prepayment of the filing fee. In your application, you must propose a payment schedule of not more than four payments that includes the amount of each payment and the date on which each payment will be made. If you fall behind on payments and can convince the court that you had a good excuse, the court can extend the total time for paying the filing fee to six months. If you don’t pay on time and the court doesn’t accept your excuse, the court can dismiss your bankruptcy petition.
The Bankruptcy Court will consider waiving the filing fee for debtors who cannot pay the fee in installments, but those requests are rarely granted. To qualify, a debtor must have a family income that is less than 150 percent of the poverty guidelines established by the United States Department of Health and Human Services for the state in which the debtor resides.
- Chapter 13 bankruptcy.
The filing fee for a chapter 13 repayment plan is $281. Since you need to have sufficient income to make plan payments in order to qualify for a chapter 13 bankruptcy, the filing fee cannot be waived. Under very unusual circumstances, you may be able to pay the filing fee as part of your chapter 13 plan. You will need to ask your bankruptcy attorney whether that is possible in your case.
The fee that your attorney will require to advise you about bankruptcy, to prepare your petition, to negotiate reaffirmation agreements with your creditors (if necessary), and to represent you in court will depend upon the type of bankruptcy you file and the complexity of your case. Your bankruptcy attorney will discuss the fee and payment terms with you during your first consultation.
Credit Counseling and Debtor Education
Within six months prior to filing bankruptcy, you are required to obtain credit counseling from an approved provider. The charge generally ranges from $20 to $50 although some agencies provide that service for free. You should consult with your bankruptcy attorney before choosing a provider, because some will try to discourage bankruptcy, even if that is your best option, and will try to sell you the debt management services that they provide. Your attorney can recommend reputable and approved credit counseling providers that will suit your needs.
In addition to credit counseling, you are required to complete a personal financial management course. You do not need to take the course before filing bankruptcy but you must complete it within 60 days of your first meeting of creditors (in a chapter 7 bankruptcy) or before making your last plan payment (in a chapter 13 bankruptcy). The cost of the course is typically $50, although you can ask for that fee to be waived or reduced if you cannot afford to pay it.
Bankruptcy is complex and many answers depend upon your specific situation. If you still have questions you can schedule a free consultation with a bankruptcy attorney.