Low Cost, to No Cost Bankruptcy

A person contemplating bankruptcy more often than not has little reserve savings to retain a bankruptcy attorney. The cost for filing a bankruptcy case varies greatly from attorney to attorney. Certain costs are fixed. The Court filing fees are fixed, and as a general rule of thumb are approximately $300 for either a Chapter 7 or a Chapter 13. In some cases, the Court filing fee can be waived or paid in installments. This is accomplished by filing a Motion with the Court illustrating that the filing fee poses a hardship. If the Court does not agree, then they will allow the filing fee to be broken down into three installments.

The more difficult issue is how much are the attorneys' fees, and whether an attorney is necessary. Most attorneys have a free consultation, and this is very useful, as a person seeks to educate themselves about the bankruptcy system, and what is required of them.

Some attorneys do pro bono work, or will allow the fees to be deferred for payment over time. Most attorneys will not tell you over the phone the fee quote due to the process to determine what is involved in any one person's case. When meeting with the attorney, ask if the fees can be deferred or paid later. Some attorneys have an installment plan that can help the client, others will charge ‐0‐ up front, and put the fees into a reorganization plan payment. If the monthly payment to the Trustee is low enough to work within a person's budget, then filing a reorganization chapter (Chapter 11, 12 and 13) may assist the client in not having to spend their savings on the attorneys' fees.

If the case is a simple Chapter 7, the fees will be less. Chapter 7's with an increasing amount of assets and income become more complicated. But check around, there are competent attorneys that will work with a person every step of the way, without charging too much. The rule of thumb for a Chapter 7 case on a standard fee is $800. More complicated cases will cost more, less complicated will cost less. If you have met with an attorney, and they are charging more than the standard rates for your area, ask them what the average cost is for the particular chapter, and ask why are they charging more to you.