The 4 costs to file bankruptcy in a bankruptcy case consists of the court filing fees, credit counseling and financial management fees, appraisal fees if these are required in your case, and legal fees.
2. Credit counseling is typically about $50 per case.
3. The financial management classes are generally about $15-$20 but are sometimes free.
4. Legal fees to file Chapter 7 bankruptcy range from about $1000 to several thousand dollars depending on the complexity of the case. The cost to file bankruptcy in Chapter 13 the legal fees are generally $3700 and most of this fee is paid in the bankruptcy plan so that the consumer does not have to come up with the whole amount at the beginning of the case. In Chapter 7 cases, the amount of the consumer pays up front is generally the entire amount that the consumer will have to pay. There are some exceptions – however – because sometimes litigation arises in the context of a Chapter 7 case or, in a chapter 13 case, additional services may have to be performed by the attorney. If this happens then the attorney may make an application to the court for the approval of additional attorney fees.
The cost to file bankruptcy is only one consideration in making the choice of attorney. Like many things in life the old saying “you get what you pay for” applies. Cut rate “affordable” legal services often cut corners. The problem in most cases is that the consumer never knows that their case was handled, if not improperly, in a way that did not benefit them as much as it could.
I’ve seen this in many cases. When you file bankruptcy, you will attend a meeting with the trustee called a section 341 meeting. At this meeting you will see the trustee ask questions of the clients and sometimes the attorneys as well. One day I watched as the trustee pressed one of the “affordable” bankruptcy attorneys about the amount of client’s monthly plan payment. I doubt that the client understood what the trustee was saying. Because the attorney did not understand how to apply the budget guidelines properly, the client was overpaying his creditors. The trustee has no power or authority to make the attorney correct the bankruptcy. So, the client over paid, and probably never understood he was overpaying his creditors as a result of an incorrect calculation by his attorney.
Bottom line is that the cost to file bankruptcy consists of the filing fee, credit counseling fee, cost of the credit report, and the legal fee. But focusing on just the cost to file bankruptcy, trying to get the lowest cost, can end up costing you in ways you may not even be aware of.