What will it cost to file bankruptcy?
| by Deborah Beeksma | February 20, 2006
Thinking about filing for bankruptcy? There aresignificant upfront costs. The purpose of thisarticle is to give you a general idea of what toexpect.
Your minimum cost will be around $350 if youprepare your own forms that you downloadfor free from the courts. These forms arecomplicated and will take a long time tocomplete.
COST #1 - CREDIT COUNSELING CERTIFICATE & BUDGETBudget: $50-$60
One of the first things that you will need to do is to contact a court-approved credit counselor. Counseling sessions take anywhere from 45 minutes to 2 hours. Following this counseling, you will receive a certificate and budget which must be filed with the court along with your bankruptcy paperwork.This has to be done within six months before filingyour bankruptcy petition. Many of counselingservices offer on-line or telephone counseling.If you have a lawyer, sometimes the fee ispart of the cost charged by your attorney.
In some cases, this fee can be waivedwaived or reduced.
COST #2 - PREPARING YOUR BANKRUPTCY PETITIONBudget: $0 - $800 +
A. Bankruptcy Lawyers
With the complexities of the new bankruptcylaws, you are wise to hire an attorney. Theproblem is that the reform bill has madebankruptcy so complicated that attorneys havehad to raise their rates. On the low end,I have found some attorneys who charge approximately$800. More likely, you are looking at $1,500 to $2,500 in attorney fees.
Some attorneys will let you pay their fees ininstallments. If the installments are througha financing house, find out what the interestrate is!
There may be pro bono (free) servicesavailable. Check with your State BarAssociation to see if there are any attorneyswho will handle bankruptcy petitions on apro bono basis.
B. Document Preparers or Paralegals
If you cannot afford an attorney but are nervousabout preparing your own form, a document prepareror paralegal can help. Plan on around $200-$400 forthese services. Document preparers cannotgive you legal advice or represent you in court.
C. Debt Relief Agency
Attorneys, document preparers, or anyone elseengaged in the business of preparing and/orfiling bankruptcy forms are considered to be"debt relief agencies," as defined in the Code.A debt relief agency is required to tell youupfront what work will be performed and whatexactly it will cost.
D. Bankruptcy Forms and Software
"Fillable" forms range from $0.00 (provided by thebankruptcy courts with minimal instructions) to approximately $700.00. You really shouldhire an attorney, but if you cannot afford one,many of the forms offer step-by-step guidance,sort of like income tax software that you mayhave used. You can find some good softwarepackages for under $50.
E. Court Filing Fees
Plan on at least a $250-$300 court filing fee. Check with your local bankruptcy court to get the exact figure.
COST #3 - MORE TO THE CREDIT COUNSELOR
When it's all said and done, you need to get a"pre-discharge bankruptcy education certificate."The average cost is $50.
~~~~~~
This article is not intended to be legal advice, buta simple guide to help you budget and plan for a bankruptcy filing. You can find links to the courts,court-approved credit counselors, attorney searchesand affordable software packages at:http://www.bankruptcy-filing.com
Your minimum cost will be around $350 if youprepare your own forms that you downloadfor free from the courts. These forms arecomplicated and will take a long time tocomplete.
COST #1 - CREDIT COUNSELING CERTIFICATE & BUDGETBudget: $50-$60
One of the first things that you will need to do is to contact a court-approved credit counselor. Counseling sessions take anywhere from 45 minutes to 2 hours. Following this counseling, you will receive a certificate and budget which must be filed with the court along with your bankruptcy paperwork.This has to be done within six months before filingyour bankruptcy petition. Many of counselingservices offer on-line or telephone counseling.If you have a lawyer, sometimes the fee ispart of the cost charged by your attorney.
In some cases, this fee can be waivedwaived or reduced.
COST #2 - PREPARING YOUR BANKRUPTCY PETITIONBudget: $0 - $800 +
A. Bankruptcy Lawyers
With the complexities of the new bankruptcylaws, you are wise to hire an attorney. Theproblem is that the reform bill has madebankruptcy so complicated that attorneys havehad to raise their rates. On the low end,I have found some attorneys who charge approximately$800. More likely, you are looking at $1,500 to $2,500 in attorney fees.
Some attorneys will let you pay their fees ininstallments. If the installments are througha financing house, find out what the interestrate is!
There may be pro bono (free) servicesavailable. Check with your State BarAssociation to see if there are any attorneyswho will handle bankruptcy petitions on apro bono basis.
B. Document Preparers or Paralegals
If you cannot afford an attorney but are nervousabout preparing your own form, a document prepareror paralegal can help. Plan on around $200-$400 forthese services. Document preparers cannotgive you legal advice or represent you in court.
C. Debt Relief Agency
Attorneys, document preparers, or anyone elseengaged in the business of preparing and/orfiling bankruptcy forms are considered to be"debt relief agencies," as defined in the Code.A debt relief agency is required to tell youupfront what work will be performed and whatexactly it will cost.
D. Bankruptcy Forms and Software
"Fillable" forms range from $0.00 (provided by thebankruptcy courts with minimal instructions) to approximately $700.00. You really shouldhire an attorney, but if you cannot afford one,many of the forms offer step-by-step guidance,sort of like income tax software that you mayhave used. You can find some good softwarepackages for under $50.
E. Court Filing Fees
Plan on at least a $250-$300 court filing fee. Check with your local bankruptcy court to get the exact figure.
COST #3 - MORE TO THE CREDIT COUNSELOR
When it's all said and done, you need to get a"pre-discharge bankruptcy education certificate."The average cost is $50.
~~~~~~
This article is not intended to be legal advice, buta simple guide to help you budget and plan for a bankruptcy filing. You can find links to the courts,court-approved credit counselors, attorney searchesand affordable software packages at:http://www.bankruptcy-filing.com
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