Legal Fees in Bankruptcy
- The United States saw almost 1.5 million bankruptcies filed between September 2008 and September 2009. However, filing for bankruptcy comes with its own set of financial challenges. You will have to pay fees to get your bankruptcy case heard in court. While it still may make good financial sense to file, you'll want to know your legal fees in advance to avoid any unpleasant surprises.
- While it is possible to file for bankruptcy without an attorney, the United States Courts strongly advise against it. Some lawyers charge you a fixed fee for the entire procedure. This generally costs between $1,000 and $2,500 as of 2010, depending on your lawyer. Hourly fees may be the way to go; however, if you think you'll be communicating with your lawyer frequently, avoid this option as it can add up quickly. Lawyers generally do not work on retainer for bankruptcy cases. Many lawyers will be willing to work out a payment plan with you.
- The largest fees associated with filing for bankruptcy are the filing fees themselves. The filing fees vary depending on which chapter of bankruptcy you are claiming. As of 2010, Chapter 13 costs $274 to file, while Chapter 7 costs $299 to file. All chapters for individuals allow you to pay your filing fees on an installment plan. The court requires you to pay your first installment at filing -- $89 for Chapter 7 and $73 for Chapter 13. Chapter 7 filers may then pay $70 per month until the fee is paid off. Chapter 13 filers must pay the $73 deposit at filing and the $200 balance a month later.
- For those filing for bankruptcy jointly, it is possible to separate your bankruptcy case -- for a fee. Fees vary depending on what chapter of bankruptcy you have filed for. Chapter 11 is the most expensive, weighing in at $1,039 as of 2010. Chapter 12 is the cheapest at $239. Chapter 11 is a reorganization where a person or company comes up with a repayment plan for outstanding debts. Chapter 12 is specifically for family farmers and includes debt limitations, as well as requirements regarding how much debt comes from the family farm. Its limited scope accounts for its low price.
- Bankruptcy court has a fee schedule for those wishing to convert their bankruptcy from one chapter to another. Converting from Chapter 7 or 13 to Chapter 11 is the most expensive conversion at nearly $800 as of 2010. Converting from 11 to 7 is the least expensive at a mere $15.
