It's possible that you're considering bankruptcy because you're having a hard time paying off all of your bills, but the process of declaring bankruptcy will cost you money. You will be required to pay court fees, expenses for credit counseling, and most likely attorney fees if you intend to file for bankruptcy. The total cost of these costs is determined both by the type of bankruptcy petition you submit as well as the attorney you hire. Learn more about the fees associated with filing for bankruptcy if you are concerned about how you will be able to pay for it.
Chapter 7 vs. Chapter 13
The most prevalent form of bankruptcy for individuals is known as Chapter 7, which allows for the elimination of all debts and responsibilities after selected assets are sold off, and the proceeds from those sales are distributed to the debtor's creditors. Chapter 13 bankruptcy is the second most prevalent type of bankruptcy for consumers. This sort of bankruptcy allows the debtor to preserve some valued assets in exchange for agreeing to a payment plan that can last anywhere from three to five years. For instance, if the debtor wants to maintain their house, Chapter 13 of the Bankruptcy Code would enable them to make payments through a trustee, and they would be shielded from any legal action that the creditors would take against them.Bankruptcy Filing Costs
The United States Court has determined that the filing price for Chapter 7 bankruptcy will be $245 as of 2021, while the filing charge for Chapter 13 bankruptcy will be $235. There is an additional administrative charge of $78 to pay, as well as a trustee fee of $15 (if the petition is filed under Chapter 7). It is highly possible that you are being taken advantage of if an attorney or bankruptcy filing service says that your bankruptcy may be filed for a fee that is lower than this. These are the standard fees for submitting documents. It's possible that certain acts will incur additional fees for you. For instance, additional fees must be paid in order to convert a Chapter 13 bankruptcy case into a Chapter 7 bankruptcy case, to reopen a bankruptcy case, or for payments that are returned because they were made with insufficient cash. USCourts.gov is responsible for keeping an up-to-date list of all bankruptcy filing fees.Installment Payments Available, as well as Waiver Options
When you submit your petition for bankruptcy, you will normally be required to pay certain expenses. However, you may be able to ask the court to enable you to pay these fees in installments or even to have them eliminated entirely. To be eligible for a fee waiver, you need to be unable to afford the fees, even if they are paid in installments, and your income needs to be less than 150 percent of the federal poverty level. The federal poverty levels are published by the Department of Health and Human Services of the United States of America. These values change depending on the number of persons living in a home.Charges Incurred for Receiving Credit Counseling
You are required to attend a credit counseling session that has been approved by the court before you can file for bankruptcy. You will also be required to complete a course in financial management. The provider of these classes will typically charge a small fee in order to participate. In most cases, the costs associated with going to court are less than $50. There are fee waivers and discounted rates available, and eligibility is determined by household income. On the website of the United States Department of Justice is a list of agencies that have been approved in each state. Visit their websites to obtain information regarding the fees associated with the mandatory courses for bankruptcy.Payments to Lawyers
The cost of hiring an attorney can range greatly based on factors such as the state in which you live, the attorney you choose, and the degree of difficulty of your bankruptcy case. The median cost of filing for bankruptcy under Chapter 7 in each state ranges from $692 in Idaho to $1,530 in Arizona. The average cost of a Chapter 13 case is significantly more than that of a Chapter 7 case, ranging from $1,560 in North Dakota to $4,950 in Maine. You should plan on hiring an attorney to help you file your case unless you are an expert in the rules of the court where you file, the procedures outlined in the United States Bankruptcy Code, and federal procedures. If you choose to represent yourself in court, you should be aware that it is against the law for judges and other court staff to provide you with any kind of legal advice. Do not let the possibility of the expense of filing for bankruptcy dissuade you from pursuing the option. If you are unsure about whether you need to file for bankruptcy or want an estimate of the overall cost of filing for bankruptcy in the event that you do need to file, you can speak with one of the many attorneys that give consultations at no cost or at a discounted rate. To better understand your legal alternatives, it is recommended that you visit many different attorneys that provide free initial consultations. There is a possibility that you will be able to pay your attorney in installments; however, you should be aware that the attorneys may only spend as much time on your case as you have paid for them to do so. If you want them to continue working on your case after the retainer you paid runs out, you'll need to make another payment to them.