HOW MUCH DOES IT COST? This seems to be the first question that many folks ask me when they call me about bankruptcy. Unfortunately, this is not a one size fits all type answer, so the best answer I can give is that “IT DEPENDS”.
Chapter 7 for my firm as of this writing has a legal fee between $1000-$2000 plus costs of about $400. So it would be appropriate to budget around $1500 or so.
Chapter 13 lawyer fees are usually between $3000-$3500 although we typically let clients pay half of the fee through their re-payment Plan. In our firm, it is appropriate to budget $1500-$2000 to get a Chapter 13 filed, including all costs, with any legal fee balance paid through the bankruptcy repayment Plan.
We work with our clients with payment plans to be affordable and many of our clients will stop paying their creditors, using those fund to file their case instead.
Exact fees will Depend on many factors though, such as:
It depends on which type of bankruptcy we are filing. A Chapter 13 is more expensive than a Chapter 7, although some lawyer fees can be put on the monthly repayment plan to help ease this burden.
It depends on the details of the case. More complicated cases are usually more expensive than easier cases. An easy case may consist of one with lower debt, less assets, lower income. It takes more work to prepare a case involving multiple properties, business income, trickier assets. When I set my fee on each each it can vary a bit depending on the circumstances.
It depends on you (the client). A client who is more organized with all of their documents from the start will certainly be easier to deal with. Helpful tip- Consider have copies of your last 2 years tax returns, 6 months of your paystubs or other income, bank statements for 3-6 months, deed-mortgage balance-house valuation report if you own property, a list of your debts. You will also need to complete a pre-bankruptcy credit counseling course (usually done online) before filing.
It depends on the timing. Some lawyers may negotiate their fee if you have all of the payment in hand or a big chunk of it at the start. Otherwise, the lawyer will be dealing with multiple payment from you over time and during the time your circumstances could change. Another timing issue is whether you need an emergency fast filing done and how much time the lawyer can dedicate to your case.
It depends on the lawyer. There can be a bit of a range between what different lawyers charge. Usually the lowest fees might be from higher volume firms that are sometimes known as “bankruptcy mills”. Obviously, your case will not get as much attention with this sort of company, some of which have a national presence and typically have a young local lawyer doing the intake but a clerk in a different state preparing the papers. I would suggest avoiding that sort of company. Research the company and lawyer to see what his/her clients say in reviews and try to find referrals from others who might have used the lawyer. The lawyer with the highest fee may not necessarily be the best either, so put the time in to really research this. Experience also counts, so please take that into consideration.
It depends on what is included in the price. Many lawyers charge extra fees for extra items such as vehicle reaffirmation agreements (we include these in our price), motions, and various court appearances. I have had many clients come to me after they felt like they were mislead or overcharged from prior attorneys.
In summary, bankruptcy fees vary depending on the details. Be careful which lawyer you pick for your bankruptcy as it can have bad consequences if things are not handled properly. Carefully research the lawyer and make sure you are comfortable with your decision. Be very prepared with prior research, documents, and a plan to pay the lawyer and you will be in a much better situation. Mostly, understand that the bankruptcy process will be a “cooperative” effort between you and your lawyer. You will need to work together to get everything done right.
Bankruptcy can be a very powerful solution for those with financial problems, but it has to be done right and will require a bit of work from everyone involved.
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