How Much Does It Cost to File Bankruptcy?
Posted By
on Oct 17, 2010 9:29am PDT
Most consumers want to know how much it costs to file bankruptcy when considering whether a bankruptcy filing is an option for them. The average cost for a chapter 7 petition in 2007 to 2008 was $1399.00, (according to a study published by the ABI Law Review). Costs have risen due to the new requirements passed by Congress in 2005. The new law requires that the consumer produce the following:
- last 6 months pay stubs
- last two years tax returns
- obtain credit counseling prior to filing bankruptcy
Attorneys under the new law must analyze income during prior 6 months before filing bankruptcy under the means test, to determine if the consumer is eligible for chapter 7 or chapter 13, produce copies of tax returns and pay stubs for the chapter 7 Trustee, along with other requirements. Attorneys are also required to do due diligence concering the consumer's debts, most attorneys will require that the consumer obtain a credit report, so that all debt is listed on the bankruptcy petition.
Likewise, cost for chapter 13 has risen. According to the same study the median cost for consumers was $4,077 in 2007 and 2008, from about $2900 in 2003. Costs to consumers included attorney's fees, filing fees, credit counseling and debtor education fees.
In 2010, a bankruptcy lawyer's chapter 7 fees vary but should be in the range of $1,000 to $2,000, depending on the amount of debt and the complexity of the case. Fees for chapter 13 are typically a flat fee of $4500 for the entire case, most bankruptcy attorneys will require $2400 at the beginning of the case with the balance of the fees paid through the chapter 13 plan. Most bankruptcy lawyers will give you a free initial consultation. You can keep the fees down by being well organized and well prepared.
Make sure you hire an experienced attorney, someone who knows all the laws requirements and the local Trustee's and their requirements. Hiring a capable attorney will ensure that your case goes smoothly. Call your Baltimore Bankruptcy Attorney or Montgomery County Bankruptcy Attorney for a free consultation, to discuss your case.
Study results were published in the Consumer Bankruptcy News, by LRP Publications in its October 7, 2010 issue.