Chapter 7 & Chapter 13 Summary - Fort Collins Bankruptcy Cost

Filing for bankruptcy can cost anywhere from a few hundred to a few thousand dollars.

Filing fees and other miscellaneous costs required to file a bankruptcy petition typically range from $300 to $400. If you’re filing on your own, you may not have to pay much more than that.
Working with a bankruptcy lawyer can add to those figures significantly. Their fees can vary widely based on the type of bankruptcy you file for, the market rate where your attorney practices and the complexity of your financial situation.
Coming up with any extra money might seem impossible if you’re already struggling to pay for basic expenses and creditors are breathing down your neck. Luckily, assistance may be available if you believe bankruptcy is the right choice for you.
Let’s look at the fees you may be responsible for and a few ways you might be able to pay for them.

Bankruptcy filing fees and other costs

Bankruptcy court fees depend largely on the kind of bankruptcy. In general, most consumer bankruptcy cases fall under Chapter 7 or Chapter 13.
Under Chapter 7 bankruptcy, many of your assets are liquidated, and the proceeds are used to repay your creditors. After your creditors are paid and your eligible debts are discharged, you’re no longer responsible for repaying your debts (as long as they’re included in the discharge).
Rather than completely discharging eligible debts, Chapter 13 bankruptcy is more of an extended repayment plan. You develop a plan to repay your debts over a period of three to five years, giving you an opportunity to retain more of your assets than if you filed for Chapter 7 bankruptcy.

For both Chapter 7 and Chapter 13 bankruptcy, you’ll be responsible for paying fees just to have the bankruptcy court hear your case. These can include …

• Filing fee: The cost to file for Chapter 7 is $335, and $310 for Chapter 13.
• Credit counseling fee: If you want to file for bankruptcy, you’re required to receive credit counseling first. Many agencies charge a nominal fee for this service, which can cost around $50, according to the Federal Trade Commission. If you can’t afford to pay, you may be able to get the fee waived.
• Debtor education course: You must complete this course after you file bankruptcy in order to get a discharge. The cost can range from $50 to $100, according to the FTC. If you can’t afford the fee, you may be able to get the provider to lower their fee or waive it completely.

Bankruptcy attorney fees

If you choose to work with a lawyer, their fees will probably account for the largest chunk of your bankruptcy costs. But it will almost certainly be worth it.
Bankruptcy laws are complicated, and you could lose income or property unnecessarily if you’re not familiar with the law. Sound legal advice can help protect you and improve your chances of receiving a favorable outcome.
“Our job is to make the bankruptcy process as simple as possible for [our] clients. We’re here to foresee any problems that can be … prevented,” says Ashley Morgan, a bankruptcy attorney in Northern Virginia. “It’s usually more time-consuming and costly for me to fix problems [after someone files on their own] than it is for me to prevent them.”

Average costs

The cost of hiring a bankruptcy attorney varies widely based on your location’s market rate and the complexity of your case.
In general, costs ranging from $500 to $3,500 are considered typical for Chapter 7. You’ll be required to pay the fee before you file, since attorney’s fees could qualify as part of the debt discharged in a successful Chapter 7 filing.
Fees for a Chapter 13 filing generally range from $2,500 to $6,000, but you don’t usually have to pay the entire fee up front. You may be able to pay part of it before you file and cover the rest through your debt-repayment plan.

Credit: Credit Karma

Chapter 13 Summary - Bankruptcy Cost Fort Collins

If you’re trying to deal with too many debts, you’re probably wondering whether Chapter 13 bankruptcy will help you out. Once you’ve decided that Chapter 13 might be the best option for your financial situation, your next questions are likely to be how much it will cost and whether it will work for you. In order to get some real-life answers to these questions, we surveyed readers across the country about their recent experiences with bankruptcy. Here’s what we learned from those who filed for Chapter 13. 

How Much Do Chapter 13 Attorneys Charge?

Bankruptcy law is complex and confusing. Chapter 13 cases can be especially knotty, and mistakes may lead to serious financial problems down the road. So we weren’t surprised to learn that almost all of our readers (97%) hired a lawyer to help them through the Chapter 13 process. The cost for their attorneys typically ranged from $2,500 to $5,000. But most readers (63%) paid $3,000 or less.
Still, the $3,000 average cost was twice the average that other readers paid their lawyers to handle Chapter 7 cases. Attorneys charge more for Chapter 13 cases because they take longer and involve more work. But Chapter 13 offers an advantage in how attorneys’ fees usually work: While the vast majority of bankruptcy lawyers charge a flat fee that covers their basic services, most of the time, they’ll only ask for an initial down payment before filing the Chapter 13 bankruptcy petition. (At that point, you’ll also have to pay the filing fee: $310 as of December 2017.) Then the rest of the attorney’s fee is included in your monthly payments under the Chapter 13 plan, which means that it comes out of the amount that would otherwise go to your creditors.

The amount bankruptcy lawyers charge depends on several things, including their level of experience and where they work. Like other expenses, attorneys’ fees tend to be higher in large urban areas on the coasts. But there’s another important factor affecting this cost in Chapter 13 bankruptcy cases: The court must approve the amount you pay your attorney. In order to simplify the approval process, many courts have guidelines for fees that they’ll automatically consider reasonable (known as “presumptive” or “no look” fees). The guidelines may also list the basic services that should be covered, as well as add-on amounts for business cases and further services that might be needed (such as filing plan modifications or motions). These presumptive fees vary from state to state and among districts within larger states. Examples of the range of presumptive fees for basic services in a few populous states:

• California: $3,300 to $5,000

• Texas: $3,000 to $3,825

• Florida - $3,500 to $4,500

• Michigan - $2,600 to $3,650

• Virginia - $4,000 to $5,100