How much does a bankruptcy cost? While there is no definitive answer to this question, you can gauge how much you will spend on your bankruptcy if you know what you will be paying for. Here are the three major fees that you may have to pay:
The first and most obvious fee is the application fee, which you pay when you file the application. According to uscourts.gov, the fees for Chapter 7 and Chapter 13 were as at June, 1 2014. You can also find fees for other bankruptcy chapters at the site.
These fees are used for administrative duties related to your bankruptcy.
The good news is that you don't have to pay the fee in full. You can request the court to pay it in installments for up to 120 days after the filing of the petition. In fact, if you are particularly cash-strapped, you can ask for a waiver so that you don't pay the fee at all. However, you may only qualify for a waiver if:
- You can't pay the fee in installments
- Your income is below 150% of the poverty line
- You are applying for Chapter 7 bankruptcy
Credit Counseling Charges
Another fee you may have to pay is the charge for credit counseling. You cannot file for Chapter 7 or Chapter 13 before getting credit counseling (which you should do six months in advance), and most counselors charge less than $50 for the service. The consultation is meant to confirm that bankruptcy is the only way to handle your debts. Again, the agency may waive this fee if you cannot afford it.
There are also exceptions to this requirement. For example, you may escape it if you can show that:
- You need an immediate bankruptcy application (for example to stop a foreclosure).
- You have a pressing military duty.
- You have disabilities that bar you from attending the counseling sessions.
Debtor Education Course Fee
The third fee you may be required to pay is that for debtor education. Also known as budget counseling and pre-discharge counseling, you take the debtor education course after making the filing but before getting the bankruptcy discharge.
The good news is that it also usually costs less than $50, and you can take it online or even via mail. On top of that, the agencies may also allow you to pay it on a sliding scale. Just like credit counseling, you may be exempted from this requirement if you are serving in a military zone or cannot take the course due to a disability.
On top of these fees, you should also consider your lawyer's fees. While not a requirement of the courts, having a lawyer will help you to avoid creditor harassment, streamline the bankruptcy application process, and generally avoid mistakes that may derail your application. To learn more, contact a company like Bill Bodensteiner Attorney At Law with any questions or concerns you have.