How Much Does It Cost to File Bankruptcy? What are Normal Fees for an Attorney?

When it is apparent that you need to file bankruptcy, the first question I am asked is how much does it cost to file bankruptcy.  When money is tight, this is a reasonable question; however, seeking the “cheapest” bankruptcy attorney is a mistake.  Bankruptcy cases are not identical and although your case might seem “easy” there are lots of rules that may take an easy case and make it more complicated than expected.  The bankruptcy process has lots of traps and issues and hiring a bankruptcy attorney that is familiar with the process, familiar with the trustees and familiar with the Court is more important than the first question:  how much does it cost to file bankruptcy.

Average Cost of Chapter 7 Bankruptcy Attorney’s Fees

The main cost of filing for bankruptcy is the attorney’s fee.   Regardless of where you file your case, the filing fee for a chapter 7 will be $306.   Based on my conversation with other experienced attorneys, the attorney fees for a Chapter 7 bankruptcy in Indianapolis averages $1,200 – $2,000 depending on the complexity of the client’s case so you an see there is a large range to consider.  Attorney fees for a bankruptcy vary by where you live with some large metro areas charging an average higher fees, some lower.  Some lawyers will charge based on the complexity of your case or the number of creditors you have.  There may be a higher charge if you own a company or if there is a likelihood of challenges to your bankruptcy or litigation.  The cost of a bankruptcy attorney will vary based on the attorney’s level of experience and reputation in the field. Established firms will generally charge more than a new lawyer fresh out of law school looking to make a name for him or herself. Jason Wischmeyer allows clients to make an initial $300.00 payment to get things started and will tell you the fee for your bankruptcy during your first consultation after he has an idea of how complex your bankruptcy will be.

Cost of Chapter 13 Bankruptcy

Chapter 13 bankruptcy fees are usually set by the local Bankruptcy Court, but a rough national average is about $3,000. In Indiana, an attorne can charge up to $4,000.00 for a Chapter 13 Bankruptcy; however, Jason Wischmeyer only charges $3,500.00 as he recognizes that this can help keep your plan payment down.  With a Chapter 13 bankruptcy, there is less initial out of pocket cost with Jason Wischmeyer because the attorney’s fees can be paid out as part of the chapter 13 repayment plan. The filing fee for a Chapter 13 proceeding is $281. The attorney then receives payments in small monthly installments as part of their client’s chapter 13 plan. For example, a bankruptcy firm that files a chapter 13 case for little money down will then receive a check each month from the chapter 13 trustee as payment for their services. The checks can be for as little as $20 or $30 dollars depending on jurisdiction and how much the client put down at the beginning of the case.

Tack on a Little Extra For Required Courses…

In addition to attorney’s fees and filing fee, debtors are responsible for a credit counseling and personal financial management course.  Wischmeyer Law Office has identified inexpensive credit counseling classes for their clients in an effort to minimize the out of pocket expense for a client.  Other attorneys will provide the courses that will cost $50 – $100 versus $15 – $20 with Wischmeyer Law Office.

You Get What You Pay For

In virtually any city you visit you’re sure to see billboards advertising cheap chapter 7 filings.  You can find the same thing on Craigslist or with an attorney referral program.  When considering how much does it cost to file bankruptcy, it is not wise to shop for the cheapest bankruptcy even if that’s your first instinct. Filing for bankruptcy is more than just filling out some forms, bankruptcy reform legislation passed in 2005 made things quite a bit more complicated for both debtors and lawyers. 

You need a lawyer who knows the local court system as well as its rules and who can communicate effectively with the case trustee. The lowest priced attorney doesn’t always fit this description.   You want an attorney with experience and let’s be honest a low price attorney often comes with inexperience and lack of attention to detail. When you pay for a lawyer, you want to make sure that a lawyer is overseeing your case. Too often, the lowest priced bankruptcy firms will simply turn your case over to a paralegal who prepares it from start to finish with little or no supervision. While there are some great bankruptcy paralegals out there who play an integral role in helping debtors nationwide, you need an attorney focused on your case. With an experienced attorney, it may cost a little more, but if there’s a problem, an experienced attorney can pick up the phone and call the trustee on your behalf. A long career has built up credibility with the Judges and they won’t be phased by an objection to one of your exemptions. Good bankruptcy lawyers create value by minimizing the risk that something will go wrong with your case.  At Wischmeyer Law Office, Jason Wischmeyer oversees your case and prepares your filings and this helps insure that nothing will go wrong in your case.

Especially when contemplating bankruptcy, how much does it cost to file bankruptcy seems like a logical question.  However, spending a few hundred extra dollars is probably worth the peace of mind that comes with knowing you’re in good hands. Further, most bankruptcy attorneys understand the circumstances you find yourself in and offer manageable installment plans.  Find an attorney that will be hands on with your file and will work with you to make sure you get the discharge and fresh financial start that you are seeking.