The big question during bankruptcy is how much it will cost. This is a very subjective factor, and it depends on various aspects. The cost of application and overall bankruptcy administrative fees or filing fees would range under $400 depending on the state you reside in. However, there are other costs with bankruptcy that determine how much you might have to cough up for your bankruptcy. To know more about bankruptcy and its related aspects, log on to https://www.recoverylawgroup.com/bankruptcy/.
Aspects that affect bankruptcy filing costs
There are several aspects that can affect bankruptcy filing costs. These can determine if you might end up spending more on the overall process or it might be wrapped up under $400 which is the only fee you will pay for filing and administration. These can be listed as follows-
- With an attorney or all by yourself
A bankruptcy attorney just like any other legal aspect plays an important role in assisting the filer with various filing procedures, use of sections in favor of the filer, putting forward motions in case of need, and guiding the filer throughout the bankruptcy process. However, some people might prefer doing all by themselves and do not want to incur any bankruptcy costs or they feel they are self-sufficient to manage the bankruptcy process. In this case, a bankruptcy filing wouldn’t cost much to the filer.
The average cost an attorney might charge might depend on the type of chapter used. For chapter 7 the fee range could be $500-$3,500. Similarly, the fee could range between $2,500-$6,000 for a chapter 13 bankruptcy. The important thing to note here is that the attorney fee for bankruptcy is regulated and the bankruptcy judge might investigate the fees charged and might ensure the attorney is charging only reasonable fees.
- Depending on the chapter
Chapter 7 has a slightly higher filing fee it is $335 vs $310 which is for chapter 13. The other cost which is not exactly fee that is associated with chapter 7 is with respect to the liquidation of assets. The assets that are liquidated during bankruptcy, have some commission fixed for the bankruptcy trustee that is eventually deducted from the estate. The estate here means the pool of funds that is used to settle the debts of the debtor which is arrived from liquidating assets or by adding any income or qualified settlements that can be included in the pool to settle the debts.
Chapter 13 like chapter 7 also has some costs which are often referred to as handling or processing charges, which are deducted by the bankruptcy trustee to settle the monthly payments to the respective lenders as per the payment plan. These costs are not additional but are deducted from the installment agreed upon by the bankruptcy filer and approved by the bankruptcy court. If bankruptcy isn’t filed and a walkaround has arrived between the lender and debtor, all these costs can be evaded.
- Credit counseling and financial management
There is a requirement for every bankruptcy filer to complete two educational courses. One must be completed before filing for bankruptcy and another must be completed before the final judgment from the bankruptcy court arrives. The first is credit counseling which must be taken even before the bankruptcy application is filed. The second is the financial management course which must be completed before the bankruptcy court arrives at a judgment. Both the courses are not expensive, they might cost in the range of $50-$100 for each. Additionally, these courses can be taken online or even on phone, which makes it very convenient and easy thing to complete.
Ways to minimize bankruptcy costs
- Nonprofit organizations
At different stages of bankruptcy, there are different non-profit organizations that help bankruptcy filers with free services. Sometimes, even professional attorneys might have some fee relaxations or exemptions for people with lower income or dire financial conditions.
- Seek for waiver
There are waivers applicable in bankruptcy court for people with extremely dire financial situations. There are several requirements to qualify for the waiver, however, it can be worth it for people who need it desperately.
- Setting up a payment plan
There is an option under which the bankruptcy court in immense hardship can provide an option to the filer to pay the bankruptcy fees in installments. However, the requirement is to pay up the fee within 120 days of filing for bankruptcy.
An attorney is a very handy package that helps in adding good value to the whole bankruptcy process, ensuring it is a smooth and best possible outcome. Since the cost is regulated and the fees cannot be exorbitant, do not hesitate to contact 888-297-6203 to connect with some of the finest attorneys from Los Angeles & Dallas, TX.