Cost of filing Chapter 13 bankruptcy : A quick overview

Before finding out the cost of filing Chapter 13 bankruptcy, it is important to know what Chapter 13 bankruptcy is all about.

What is Chapter 13 bankruptcy?

Also known as wage earner’s plan, Chapter 13 bankruptcy helps the debtor in developing a repayment plan. The plan may vary from three to five years depending upon the debtor’s monthly income. If it is less than the state’s median, the plan is of three years and if more, it is five years. In no case can this period be extended over five years.

Are you eligible to file Bankruptcy13?

You are eligible for Chapter 13 bankruptcy, if…

…your unsecured debts are less than $394,725 and secured debts are less than $1,184,200.

…180 days have passed since your prior bankruptcy petition was dismissed due to your failure to appear in court or not complying with court orders or your creditors having approached bankruptcy court to recover your property over which they held a lien, thereby voluntarily dismissing your petition.

…you have received credit counseling from an approved credit counseling agency, 180 days before filing.

Once you meet these eligibility conditions, bankruptcy Chapter 13 process begins. Your bankruptcy attorney will be in the best position to tell what happens after filing bankruptcy Chapter 13.

Cost of filing chapter 13 bankruptcy

The federal laws and the courts determine the cost of filing Chapter 13 bankruptcy, and is the same across the country, including Georgia. And hiring or not hiring a lawyer has no bearing on this fee. Instead, you will need to pay attorney’s fee in addition to this. If the fee is beyond what you can afford, the court may permit you to pay it in up to four installments.

The fee paid to the United States Bankruptcy Court for filing a Chapter 13 case is presently $335.00. It is the same for all states in the United States. However, in Chapter 7 bankruptcy, the bankruptcy court can waive this fee altogether, which is not possible in the case of Chapter 13.

Attorney Fees for Chapter 13 in Northern district of Georgia, can vary. However, it is normally set around $4000.00 for first filing. Few law firms actually provide this information on website. In fact many people file chapter 13 without knowing the exact fee.

Why is it so? In most cases the fee is added into the client’s plan payment and not paid directly to the attorney. I prefer to be more upfront about fees. Most of the cases last 60 months, that means the fee only averages about $65.00 a month, and there few legal services available for that fee. Court needs to approve all the fees.

In addition to the filing fees you will also have to complete Pre-Filing Bankruptcy Credit Counseling which costs $15.00 – $25.00 and Post-filing/Pre-discharge Debtor Education, which about the same cost.

Bankruptcy attorneys need to perform due diligence before filing a case, so normally they will run and credit and lien check prior. This can cost $35.00 to $70.00, depending on number of people filing.

The bankruptcy fee is the same for all states of the US. The fee charged by attorneys, if hired, does not count towards it and has to be paid additionally.