Many debtors considering bankruptcy are shocked to discover that filing for bankruptcy isn’t free. It can seem unfair to ask a debtor that is already in financial distress to pay money to get help.
How much it costs to file for bankruptcy depends on what chapter of the bankruptcy code a debtor files under, and how complex their case is. This is something the Hanson & Payne team discusses with our potential clients during our first meeting.
The Cost of Filing for Personal Bankruptcy
There are three things every person or family that files for bankruptcy must pay for: credit counseling, court fees, and attorney fees.
Credit Counseling
Under federal law, anyone who wants to file for bankruptcy has to consult with a court-approved credit counselor not more than 180 days before they file.
The credit counselor is supposed to help the debtor pull together a list of all income, assets, and debts. The counselor then crafts a budget and advises the debtor whether or not it is possible to get out of debt in a reasonable amount of time without filing for bankruptcy. The credit counselor can charge a reasonable fee for their services, which is typically less than $100.
Click here to see the most up-to-date list of court-approved credit counselors. It is important to select a counselor from this list if you want your case to proceed.
Court Fees
Most individuals and families file for bankruptcy under Chapter 7 or Chapter 13 of the bankruptcy code. No matter which chapter they choose to file under, a debtor must pay a filing fee in order for the court to take their case.
- The fee for filing a Chapter 7 case is a flat fee of $338. This money must be paid up front, or the court will not hear the case.
- The fee for filing a Chapter 13 case is $313. This money does not need to be paid up front because it can be rolled into the court-supervised repayment plan unique to Chapter 13 and paid over time.
Attorney Fees
The amount of money Hanson & Payne charges our bankruptcy clients varies based on the complexity of their case. We do our best to keep our fees low because we understand that our clients are in a difficult position to begin with, and don’t need another bill to pay. We can estimate your fee during a consultation meeting so you will know how much you might owe us before you commit to working with us.
Much like the courts, we take payment up front in Chapter 7 cases. In a Chapter 13 case it is often possible to roll our fees into the court-supervised repayment plan.
The Cost of Filing for Business Bankruptcy
It is significantly more expensive to file for business bankruptcy than personal bankruptcy. The court’s filing fees are higher ($1738 to file for Chapter 11 bankruptcy). And the fees our firm charges are higher too, though we still charge a very modest amount that is directly related to the effort we exert on our clients’ behalf.
The difference comes down to the time and effort it takes to resolve a business case versus a personal bankruptcy. Business cases are significantly more difficult to resolve, and take much longer to resolve than personal bankruptcy cases.
A Milwaukee Area Bankruptcy Attorney You Can Trust
Don’t let worries about how much it is going to cost to file for bankruptcy keep you from filing. Meeting with a member of Hanson & Payne’s experienced team can help you figure out exactly how much it is going to cost, and which type of bankruptcy is right for you. Contact us today to schedule an initial consultation where we can go over these important details with you.