What Are the Out-of-Pocket Costs? How Do You Pay Them?
When you lose your job or have substantial uninsured medical expenses, and bankruptcy seems like the only way to get a fresh start, the last thing you want to think about is another expense. But there are expenses involved in filing a bankruptcy petition. How much are they? What kind of arrangements can you make to pay them?
The Cost of Filing for Bankruptcy
To initiate the bankruptcy process, you must file a petition with the bankruptcy court. The current fees are $338 to file a Chapter 7 liquidation and $313 to file a Chapter 13 reorganization. The bankruptcy laws also require that you undergo credit counseling and take a debt education course. The cost for each is typically between $50 and $100.
The bulk of your expense, though, will be attorney’s fees. Some bankruptcy attorneys charge a flat fee, based on the type and complexity of your petition. Others bill you on an hourly basis. With a Chapter 7 bankruptcy, it’s best to pay the fee upfront, as it may be dischargeable in the bankruptcy proceeding. With a Chapter 13, you can usually pay some portion of the fee upfront and the balance as a part of your reorganization plan.
Paying for Bankruptcy
The bankruptcy court can waive your initial filing fee, but only if your income falls below 150% of the federal poverty line. Some bankruptcy courts allow petitioners to pay the fee in installments, but the entire fee must be paid within 120 days. The credit counseling and debt education classes are run by private vendors—you can ask them directly for a reduced fee or an installment plan.
If you are concerned about paying for an attorney, you can ask for representation by the local legal aid office or look for an attorney who will work on a pro bono (no fee) basis.
Contact Attorney Howard N. Sobel
At the office of Howard N. Sobel, we work closely with people in New Jersey in personal bankruptcy filings. Contact our office online or call us at 856-424-6400 to set up a free initial consultation (on selected cases). We are currently available by phone, text message, or videoconference only. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.
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