Thursday, June 6, 2013

Can I Afford to File Bankruptcy?

One of the most common questions that we receive from people has to do with whether they can afford to file bankruptcy.  The cost of filing a bankruptcy depends on what type of case you file, as well as the attorney fees involved with the filing.  Some firms charge a flat fee for particular types of cases.

Other attorneys charge fees based on a review of each situation.  For attorneys that use this approach, factors involved in determining attorney fees would generally include: type of case; number of creditors; property owned; as well as a general review of whether there are any complicated legal issues involved with the filing. My firm makes every effort to customize our attorney fees to fit each case, rather than using a flat fee approach. 

When you sit down to discuss your case with an attorney, find out what the attorney will charge, as well as what the attorney will do for the fee that is charged.

Filing Fees

One thing that attorneys do not have much control over are the filing fees charged by the U.S. Bankruptcy Court.  In most cases, anyone attempting to file bankruptcy must also pay a filing fee to the U.S. Bankruptcy Court.  Currently (July 2014) a Chapter 7 bankruptcy has a filing fee of $335.00, and a Chapter 13 bankruptcy currently has a filing fee of $310.00.

However, there are situations where you can pay these filing fees over time, and in some cases, the Bankruptcy Court will eliminate the fee completely.  If you visit the US Courts website, you can find links to the official bankruptcy forms

Form B3A (Official Form 3A) allows debtors to pay the filing fee in up to four installments, after the filing of the case.

Form  B3B (Official Form 3B) allows the debtor to request that the Bankruptcy Court eliminate the filing fee.  This is only available in a Chapter 7 case, and cannot be used in a Chapter 13.  Whether you qualify for this depends on your income and family size.