| Bankruptcy timeline: Pre-bankruptcy |
|
|
|
Bankruptcy costs
The bankruptcy process can be expensive. Costs include the attorney's
fee, the bankruptcy filing fee and now credit counseling fee. The
charges vary from state to state. Brad Botes, consumer bankruptcy
attorney in Birmingham, Ala., and former executive director of the
National Association of Consumer Bankruptcy Attorneys, says that,
based on his communications with practitioners around the country,
the costs for a Chapter 7 bankruptcy filing can be as low as $600
to $700 and as high as $3,500 for your attorney's fees.
Some attorneys and scholars suggest preparing to pay
$1,200 to $2,500 for a Chapter 7 bankruptcy. Botes says costs for
Chapter 13 bankruptcies are set by the local bankruptcy court, and
these costs have ranged as low as $1,500 and as high as $3,500.
The court-filing fee for a Chapter 7 bankruptcy filing
is $299. A Chapter 13 is $274.
The Department of Justice's Executive Office of the
U.S. Trustees, which enforces bankruptcy laws, has not announced
what it considers a reasonable fee for bankruptcy counseling, but
you should expect to pay as much as $50 each for both the pre-filing
and pre-discharge counseling services.
However, credit counseling must be provided regardless
of the debtor's ability to pay. Jane Limprecht, spokeswoman for
the U.S. Trustees Program, says a number of factors might affect
the debt management course fee, such as length and depth of education,
because the courses range from "basic to more comprehensive."
Also, know that additional fees can arise when you
file. The fees can creep up when changes are made or additional
litigation occurs.
Pre-filing credit counseling
The new law requires debtors to participate in pre-filing
credit counseling within the six months prior to filing bankruptcy.
A debtor can contact a government-approved credit counseling agency
in his or her district. The list of credit counseling agencies can
be obtained from places such as the federal bankruptcy court and
the U.S. Trustees office.
|
