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How much does it cost to file bankruptcy?

Payment plans usually available to handle attorney fees for bankruptcy cases.

One of the factors that may prevent people in deep debt from going forward with filing bankruptcy is the cost of proceeding through U.S. Bankruptcy Court.

The court fees are modest, but depending on the geographic location of the filer, attorney costs can be significant, particularly for someone who has few financial resources.

According to the U.S. Courts website, a fee of $299 is charged to file a Chapter 7 Bankruptcy, the most common form of personal bankruptcy. The charge to file a Chapter 13 case is $274. Generally, lawyers' fees for a Chapter 7 bankruptcy cases can range from $1,000 to $2,500, in addition to court fees.

Because Chapter 13 cases, in which the debtor must pay back creditors through a court-ordered repayment plan over several years, are more complicated than Chapter 7, the attorney fees are higher. They can typically range from $2,200 to $3,200 during the three to five years that the case is active.

But once bankruptcy lawyers are retained, debtors may refer collection calls to their lawyer and stop paying creditors that will be included in the bankruptcy plan.

In both types of bankruptcy, the debtor must gather a large number of documents, such as credit card statements, mortgage papers, proof of income from all sources, car loan payments, medical bills whatever documents outline their financial situation and status of their property and other assets. The attorney provides legal guidance throughout the case, files the petition and represents the debtor during their court hearing.

In Chapter 7 bankruptcy, attorneys often offer their clients a payment plan, with one payment made to retain the lawyer and several more to pay the whole fee before the case is filed. "Otherwise, the fees owed to the attorney could just be included in the bankruptcy, and the attorney would have no way of collecting his fees," states BankruptcyHQ.com.

However, a Chapter 13 action requires more legal work and attorney time in court. "The good news is that the majority of bankruptcy attorneys do not require the full fee before filing your [Chapter 13] case, and include the majority of their fees in the bankruptcy repayment plan," according to BankruptcyHQ.com. "The attorney then gets paid by the bankruptcy trustee after your case is filed, similar to your other creditors."

In some cases, attorneys require only the $274 court fee to file the case and will arrange to have their fees paid through the repayment plan.

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