The cost of filing bankruptcy has risen since the amendments to federal bankruptcy law were added in 2005. Filing bankruptcy costs can be complicated due to the different fees that may have to be paid. The costs of filing bankruptcy can be quite low for consumers who handle the filing and petition on their own or more expensive if an attorney is involved and the case is complicated with various assets and contracts.
There are many different options for consumers to deal with their debt and budget problems. Bankruptcy is certainly one such option and generally has the greatest impact on debts and credit. Filing bankruptcy costs is just one factor to consider in evaluating credit and debt solutions. The cost of bankruptcy will vary substantially, depending upon the complexity of your case and the type of bankruptcy you file
A recent study of bankruptcy filing costs published in the American Bankruptcy Institute Law Review concluded that the average costs of Chapter 13 bankruptcy cases was 4,077.00 in 2007 and 2008 while the costs of bankruptcy for a Chapter 7 filing costs averaged $1,399.00.
The American Bankruptcy Institute Law Review study considered the costs associated with the process of filing for bankruptcy, including the court filing fees, credit counseling fees, debtor education fees that may be required, attorney fees and expenses as well as trustee fees and expenses.
An estimate of the costs for filing bankruptcy includes:
Filing fee with the court of $299.00 for a Chapter 7 case or a filing fee of $274.00 for a Chapter 13 case.
Hiring a lawyer to prepare the bankruptcy case file and to represent the consumer in court. This cost can be anywhere from a few hundred dollars to a few thousand dollars.
Before you can declare bankruptcy, the court may require that you get credit counseling from an approved counseling organization. The cost of these credit counseling programs will vary from region to region.
When evaluating the cost of filing for bankruptcy, all of the costs should be considered, not just the direct expenses on fees. The other significant costs can be the time involved and the damage to an individual’s credit history and credit score.
Individuals that may find that they cannot obtain new credit after bankruptcy or that the new credit and credit cards after a bankruptcy will have a higher interest rates and fees. Employers are more frequently checking credit reports for new hires as will insurance companies and rent management firms. An individuals credit score will be impacted by a bankruptcy for up to ten years.
Bankruptcy may very well be the best solution for consumer debt trouble, but filing for bankruptcy is a plan of action to help resolve debt issues that should be considered very carefully.