With the growing challenge of the current economy, many companies are now taking into consideration if filing for insolvency is the only solution for their company while thinking about the average cost of filing bankruptcy. Trying to survive in this difficult economy is hard enough, how much more if you realized that your company is now on the brink of loss.
Deciding to declare if you would file for bankruptcy is very hard as your company is your own brainchild and you have dedicated your time, effort and money to make it succeed. But there are circumstances that you have no other choice but to make a final decision whether to cut your company’s lifeline or hold on a little bit longer.
Filing for bankruptcy will affect your life, your reputation as a businessman as well as your self-image and future credit. If you are going to file for a chapter 7 bankruptcy it will remain in your credit for up to 10 years. You may even lose some of your properties, your credit card and you won’t be able to get a mortgage.
It is a tough decision to make but a decision you have to resolve the soonest possible time. The longer you hold on, the bigger your debt will be and it does not mean that you have filed for bankruptcy that you won’t have to pay your other loans. What you need to know now is how much does it cost to file bankruptcy and how will you go about the process of filing.
Filing For Bankruptcy: The Court Fees You Need To Know
You might be asking yourself, ‘why should there be a fee when I am already broke and filing for bankruptcy?’ Filing for bankruptcy is not free; you need to pay for the procedure and the people who will process the request. Insolvency happens during the time when money is tight and knowing the fees you have to pay is important.
First, there is a filing fee that you must pay. For a chapter 7 case, the minimum fee is $335 while a chapter 13 case has a fee of $310. There is also a Bankruptcy Trustee who will charge you $15 to $20 when you file. Knowing the circumstances of your finances, many court will allow an installment basis if you can prove that it is hard for you to pay the necessary payment on full terms. Being aware how much does it cost to file bankruptcy will be beneficial for you.
There is also a chance that you have filed a chapter 7 case but would like to change it to chapter 13 because you did not fit or qualify for the said type of bankruptcy. In this situation, the court will not request for an additional payment for the change in chapter, however, if you have filed for a chapter 13 case but would like to change it to chapter 7, the court will charge you an addition $25 as a conversion fee.
Aside from the court payments, you will also be required to undergo credit counseling and take a personal financial management course which will be around $50 to $100 depending on where you are located.
Attorney Fee for Bankruptcy Filing
Now that you know how much the court will ask if you file for bankruptcy, it is time to know how much an attorney will cost you once you file for one. An attorney fee will depend on what case you are going to file.
For a chapter 7 bankruptcy, a lawyer’s average cost of filing bankruptcy is $1250. The amount will vary on the location that you are filing. If it is in a metro area then the fee is higher but if it is at a small town the fee is much lower. The cost will also depend on the complexity of the case. A simple “no asset” case is cheaper than a case that may involve litigation.
If you are filing for a chapter 13 case, the attorney fee will be around $2750 to $3700. Each district will have their own rules and standards. Depending on the complexity of the case, an attorney may ask for an additional fee for various issues ranging from $500 to $1500.
Additional Fees If You File For Bankruptcy
As you know, filing for bankruptcy is not just about filling up forms and submitting it to court. You would have to submit your assets and work form and create a payment scheme for the Bankruptcy Trustee to check. If the trustees have some additional questions then you would have to appear in court. Appearing in court would have to mean an additional payment of about a few hundred dollars.
Filing Bankruptcy Without A Lawyer
You may be saying that filing bankruptcy price is too expensive for you and you are thinking if it is possible not to hire a lawyer for the proceeding. Yes, this is possible and it is called “Pro Se” but take note that the success rate is very low and you may be just wasting your court fee without a lawyer’s help.
The success rate of a chapter 7 case without a lawyer is 60% while a 95% success rate is viable if you hire an attorney. For a chapter 13 case, the success rate with a lawyer’s help is 55% while a slim 0.04% success rate happens when you file a “pro se.”
Finally, bankruptcy should only be considered when you have no other option. Before you do decide to file for one, make sure that you have exhausted all your effort in paying your debt as the court will investigate the case. Check with your creditors and negotiate loan settlement or try to sell your short assets to cover part of your debts.
Analyze your debts and know which of your assets are exempted from seizure. Always make sure to protect yourself and your home so that you would still be able to start a new life after going broke. Lastly, you should always be realistic and know that filing for bankruptcy will not erase all of your debts. Filing bankruptcy price will always be thought out and also there are still debts that you have to pay and you should be up front and ready to face them and pay up.