Filing for bankruptcy is a big decision. It can get you out of a tough financial situation, but can you afford it? If money is tight, you may not be able to file as easily as you’d hoped. These are the general costs of filing for bankruptcy.
Chapter 7 Bankruptcy Costs
To file for Bankruptcy, you have to pay a filing fee. For a Chapter 7, you can expect the fee to be $335 just to file. There can also be other costs such as a Bankruptcy Trustee fee, conversion fee, and classes—in 2005, a reform to bankruptcy made a change where those who file must go through credit counseling and education. Credit counseling takes place before you file, and debtor education happens after you’ve submitted your claim. You must pay for these classes, and the prices vary from program to program. To find a full list of potential costs, you can visit the United States Courts website. This government site will list all of the fees and will inform you should the prices ever change.
Chapter 7 Bankruptcy Attorney’s Fees
Most people who go to court choose to hire an attorney to help them complete a successful bankruptcy case. Lawyers can charge whatever they want for their services and you’ll have to pay upfront. The fees vary based on location and per case. “Simple Asset” cases can be completed with minimal work, but the more assets and the more complicated the case, the more work the lawyer will need to do. According to US News, the average fee in the nation was around $1,500 in 2012.
Chapter 13 Bankruptcy Costs
Chapter 13 bankruptcy also has a filing fee of $310 regardless of your financial crises. Like Chapter 7, you also have to attend credit counseling before you file and debtor education after you file. The classes must be approved by the United States Trustee Program and are not free. It is the responsibility of the borrower to pay for the classes. You can find a full list of courses available in your state on the United States Courts website.
Chapter 13 Bankruptcy Attorney’s Fees
The fees for a bankruptcy attorney while declaring Chapter 13 varies, although the law states that the fees must be approved by the court regardless of what you discussed with your legal professional. Based on your location, the cost of a lawyer can vary. According to Nolo, you can expect the prices to range from $2,500 to $5,500. During Chapter 13, you’ll work with a Trustee to create a payment plan that works for your financial situation.
Per Se Bankruptcy Cases
Do you need an attorney? The short answer is no, you don’t have to get a lawyer, but your success rate significantly increases when you’re working with a legal professional. According to a 2014 study, over a third (45.6%) of all Per Se bankruptcy cases were dismissed while the attorney-represented cases were only at 13.7% of all bankruptcy cases.
Featured Image Source: Depositphotos/© WavebreakmediaPosted on February 15, 2017