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How Much Does It Cost to File Bankruptcy?

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How Much Does It Cost to File Bankruptcy?

The need to declare bankruptcy often comes at a time when money is tight. What’s even more unfortunate is, the process isn’t free – but how much does it cost to file bankruptcy? You’ll need to pay attorney fees, court fees, and, most likely, credit counseling fees. All these can sometimes bump the total cost into thousands of dollars – and that still doesn’t warrant success. On top of that, filing for bankruptcy, even if not successful, can cause substantial damages to your overall credit. For that reason, you want to know how much you’re going to cough up before embarking on the process.

How Much Does It Cost to File Bankruptcy?

The cost of bankruptcy can be indefinite. The type of bankruptcy and the attorney you choose are the two main factors that determine the total cost. We’ll cover below some common situations of bankruptcy, its costs, and some options that come with it.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common type for individuals. It wipes the slate clean after cash from liquidated assets is distributed to creditors. The total filing fee under this type of bankruptcy is around $335. If any bankruptcy filing service or attorney claims you can pay less or more, run!  That’s most likely a scam.

Chapter 13 Bankruptcy

Chapter 13 is a popular option among debtors who want to keep most of their valuable assets. It allows a 3- to 5-year payment period, during which you (the debtor) are protected from any legal action the creditors could take. The basic filing fee under this option is $310. If you are planning to convert your case to Chapter 7 from Chapter 13, you’ll have to pay an extra $25. Similarly, you’re likely to incur additional fees when reopening a Chapter 13 case.

Attorney Fees

Much like other professionals, lawyers want compensation for their time. Usually, attorney fees vary significantly based on where you live, the complexity of your case and the time it takes to resolve your matter – more time costs more money. Additionally, the type of bankruptcy you’re filling for has a role to play. Under Chapter 7, for instance, the attorney fees could be anywhere between $1,000 to around $3,500. This may skyrocket up to $6,000 in Chapter 13.

If you’re thinking of taking this path alone (without any legal assistance) to save money, don’t. The law has lots of technical stuff that you could really screw up on your own.

Consumer Education Courses

Before filing for bankruptcy, it’s a requirement that you first receive credit counseling. You must also take a debtor education course after the process for you to get a discharge. According to the Federal Trade Commission, most agencies charge a nominal fee of around $50 for each of these services. If you can’t afford this, you may be able to get the amount lowered or waived completely.

Other factors that can affect the cost include:

  • Having non-dischargeable debts such as child support, alimony, students loan, or past-due taxes
  • Allegations that you committed fraud or the likelihood of such accusations coming up
  • Trying to stop another legal action such as a repossession of a property that served as loan collateral, a bank levy, an eviction, or a foreclosure filing against your property.
  • Having declared bankruptcy within the last eight years
  • Having a large number of creditors
  • Having multiple sources of income
  • Filing for personal bankruptcy as well as a business one.

Bartifay Law Offices

Now that you know how much does it cost to file bankruptcy, there’s no reason to cast aside bankruptcy if it looks like the only option for your situation. Bartifay Law Offices has competent lawyers to help you wherever you are in Pennsylvania. Need more info or help? Call us now!

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