| 9 bankruptcy costs you should know |
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"There is a statutory maximum the Chapter 13 trustee
cannot exceed in each case," says Larry Greer, administrative services
manager, U.S. Bankruptcy Court for the Northern District of Indiana.
"The actual percentage is set by the U.S. trustee for the region
where the trustee serves and can vary from region to region and
trusteeship to trusteeship."
The administrative fee of $39 covers the costs that courts incur for overseeing the case.
4. Amendments
to the case
Amendments are the most common change and can set a debtor back $26. They typically arise as last-minute entries, such as adding a creditor.
5. Reopening a bankruptcy case
Reopening a case for a Chapter 7 bankruptcy costs $220; $150 for
a Chapter 13.
Bankruptcy experts say cases are usually reopened
when a debtor forgets to include a creditor or the debt was assigned
to a different creditor and the debtor didn't know.
6. Conversion from a Chapter 13 to Chapter 7
Conversion from a Chapter 13 to a Chapter 7 bankruptcy costs $15.
Experts say most debtors change from a Chapter 13 to Chapter 7 because they did not have the money to meet the payment plan.
Petitioners do get one break: Conversions from a Chapter 7 bankruptcy to a Chapter 13 do not require a fee.
Henry Sommer, executive director of the National Association
of Consumer Bankruptcy Attorneys, says one reason for this type
of conversion is the debtor is facing a challenge or has lost a
challenge under the means test.
The means test is a calculation that determines whether
a person is eligible to erase his or her debt or whether the person
has the "means" to pay their debt off. Courts analyze
the average income six months prior to filing and compare that amount
to the median income for the state.
Sommers says another reason is the trustee successfully
argued that some of the debtor's property could be taken away in
the bankruptcy.
7. Splitting a case
Splitting a case or the "division of a joint case" can cost Chapter 7 filers $220 and Chapter 13 filers $150. This typically occurs between married couples.
"The statue permits a married couple to file
a joint case," says Greer. "From time to time a situation
comes up where, for example, a member of the couple determines they
may not need to be a part of the bankruptcy case, so the cases are
split."
8. Compelling
abandonment of property
A debtor may compel abandonment of property, but it will cost $150.
Sommers says this can occur when "the court finds
the property is not worth selling to the benefit of creditors and
therefore the trustee should give up any right to do anything with
it."
Most experts say it doesn't occur that often, but
Sommers describes one situation where a debtor may decide to take
action.
"For example, in areas where real estate is going
up, occasionally trustees drag out the case to say the property
is worth more and they should sell it and the debtor doesn't want
that to happen," says Sommers.
9. Withdrawing
the reference
Another action that some experts describe as rare is to withdraw
the reference. This also costs $150.
"The district court has jurisdiction of all bankruptcy
cases," says Diane S. Robl, Esq., clerk of United States Bankruptcy
Court, Western District of Kentucky. "They have referred those
cases to a bankruptcy court.
"In cases that involve issues that are not addressed
in bankruptcy, the parties -- either debtor or creditor -- may request
the district court to withdraw the reference to the bankruptcy court
so the district court can hear all matters, even those not addressed
in bankruptcy."
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