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Bankruptcy Alphabet – C is for Costs

by Dorota Trzeciecka on January 22nd, 2012

A question on the mind of most potential bankruptcy clients is “How much will this cost me?”.   Whether you’re filing Chapter 7 or Chapter 13, the costs can be broken down into the following categories: attorneys’ fees, credit counseling and financial management fees, and court filing fees.  In addition, if an amendment to your bankruptcy forms is necessary after filing of the original petition, amendment filing fees may apply.

Despite of what you may believe, bankruptcy lawyer fees are not fixed.   Lawyers decide what to charge, based on the services they will provide and how complicated your case is likely to be.  But, the fees do not go unchecked.  Bankruptcy attorneys have to file a Disclosure of Compensation of Attorney for Debtor with the court disclosing the fee in each individual case.

There are two important things that you want to remember about attorneys’ fees.  If you’re filing Chapter 7, your attorneys’ fees have to be paid in full by the time you file your petition.  That is because no lawyer likes to become your creditor in Chapter 7 bankruptcy — they would likely not be paid for their services.  It does not mean that you have to come up with the full amount of attorney’s fee for Chapter 7 all at once.   Most lawyers will let you pay it in installments, up to the time of filing of the petition.

Chapter 13 fees, on the other hand, can be paid through your Chapter 13 plan, with or without a deposit at the start of the case.  Chapter 13 fees are two to three times the amount of what the Chapter 7 fees are.  They’re generally capped at a certain amount by the local rules and guidelines.  For example in the Southern District of Florida, the standard attorney’s fees for a Chapter 13 bankruptcy are set at $3,500.   Additional set fees may be allowed for filing any necessary motions, for example, a Motion to Value Real Property or PersonalProperty, without application to the court.  Your retainer agreement should specify those services that are included in the standard fee and those set fees in addition to the standard fee.  The court may award other fees by special application to the court only.

Before you can file petition for bankruptcy, you have to complete a mandatory credit counseling, and before your debts can be  discharged, you have to complete a financial management course, at the fee ranging from $10-$45 each.

The court filing fees are $306 and $281 for Chapter 7 and Chapter 13, respectively.

Each amendment to your bankruptcy schedules in both Chapters is $30; this is in addition to the fees specified by your attorney for amendments.

Check out more bankruptcy terms  beginning with C


Chapter 7

Chapter of Relief

Collection Agencies

Competence and Compassion 




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