After the passage of the Bankruptcy Reform legislation in 2005, it became much more expensive for Debtors to file for bankruptcy relief. The court filing fees increased and new requirements for credit counseling and debtor education (financial management) only added to the costs of filing a case.
What is the minimum amount I will need to pay to file a Chapter 13 case?
Every bankruptcy lawyer has a different way of approaching the initial costs of filing a bankruptcy case. Some lawyers require the payment of substantial money down. Other lawyers require only that you pay for the costs of credit counseling before filing your case. But don't be fooled by a bankruptcy attorney that gets you into a Chapter 13 bankruptcy case for little money up front. The cost of credit counseling is approximately $34.00. Whether the bankruptcy lawyer collects this money from you or makes you pay it directly to the counseling group, the money must be paid before your case can be filed. If you use the wrong provider you will have to incur additional costs to complete your credit counseling with an approved provider.
What other costs should I expect to pay upfront to file a Chapter 13 bankruptcy case?
In addition to the costs of credit counseling, most bankruptcy lawyers require you to pay for a credit report that will download all of the information from your report into their bankruptcy software program. This guarantees that all the creditors who claim you owe money and who are reporting to the credit bureaus are listed in your case. Running the report is also a great way to catch judgments or liens that are being reported on your credit report that you may not know about. The cost for running a credit report varies but $30 for an individual report to $50.00 for a joint credit report. These are average costs.
The cost for Debtor Education or Financial Management must be paid for you to get a discharge.
One of the requirements of the new bankruptcy laws is that you must complete a financial management course and file a Certificate of Completion with the Bankruptcy Court before you will be granted a discharge. The financial management requirement is easy to overlook in a Chapter 13 case because Chapter 13 bankruptcy cases last from 36 to 60 months. It is best if you pay your lawyer for the financial management course before you actually file your case. It is also best if you complete the course within 30 days of filing your case. By paying up front and immediately doing your financial management, you enhance your chances of getting your discharge at the end of your case. You need to remember that if you fail to complete the course and file the certificate, your bankruptcy case will be closed without the entry of a discharge. If your bankruptcy case is closed without a discharge, you will have filed bankruptcy but you will still owe any unpaid debt. The average cost of a financial management course is $8.00 per person. The course is taken online or completed by watching a DVD.
The Court filing fee may have to be paid.
If you have previously filed a bankruptcy case and the court filing fee was not paid in full, the Bankruptcy Court will require you to pay the full filing fee upfront. The filing fee for a Chapter 13 bankruptcy case is $274.00.
Are there any other fees that I may be asked to pay?
Most experienced bankruptcy attorneys require that you pay a small portion of your fee before they will file your case. The total upfront costs required for all the fees and attorney fees generally ranges from $250.00 to $375.00 for Chapter 13 bankruptcy cases in the Northern District of Alabama. The amount of prepaid fees and costs may increase if you have filed a Chapter 13 bankruptcy case in the recent past.