Our regular readers should know that bankruptcy allows debtors to discharge their obligations in a relatively swift manner. More specifically, a Chapter 7 bankruptcy allows debtors to swiftly discharge most debts – usually not student loans, not federal taxes in certain cases, etc. – in a swift fashion without any repayment requirements; Chapter 13 bankruptcy, on the other hand, restructures a debtor’s obligations to make them more manageable. As we’ve discussed, these different bankruptcies have their own separate processes and requirements. Today, we will go over the cost structures of Chapter 7 and Chapter 13 bankruptcies. As we will see, the costs of these two different avenues are quite a bit different. Many people find it perplexing that a bankruptcy should cost money. While this may seem counter-intuitive, you have to remember that even filing for bankruptcy involves work, and work is almost never done for free.

Court Filing Fee

When you file either a Chapter 7 or Chapter 13 bankruptcy, you will be required to pay certain fixed court fees. For a Chapter 7, you will need to pay a flat filing fee of $245, an administrative fee of $78, and trustee fee of $15. For a Chapter 13, you will need to pay a filing fee of $235, and an administrative fee of $78.

Attorney Fee

If you hire an attorney – something which is highly recommended – the attorney fee will vary depending on both the type of bankruptcy and the complexity of the case. For a Chapter 7 bankruptcy, attorney fees range from a low end of $1,500 to a high $3,000. The more complex the case, the higher the fee will tend to be; the location in which you file also impacts the cost. This means that someone in Miami-Dade County will tend to have a different average rate compared to someone in another county. For a Chapter 13 case, attorney fees range from a low end of $3,000 to a high of $5,000. Chapter 13 bankruptcy cases are always a bit more involved, and so the range is a bit higher.

Credit Counseling Coursework and Credit Report

One cost which is frequently overlooked is credit counseling coursework. When you file either a Chapter 7 or Chapter 13 bankruptcy, you will be required to complete 2 separate credit counseling courses. These courses must be completed or else your bankruptcy cannot move forward. When combined, these credit counseling courses will usually amount to about $50. In addition, the filer will incur a fee for requesting a credit report from an authorized vendor, which usually costs around $75.

Complicating Factors

An astute reader might wonder: what sort of factors can complicate my bankruptcy and potentially make it more expensive? There are many things which can create more complexity and lead to a higher fee, with the most common being: home mortgage loan modification, or having to file various morins, such as a post-confirmation modification of plan, motion to avoid lien, motion to value property, motion for hardship discharge, motion to rehear, and certain other motions as well.

Contact Financial Freedom Advocates for More Information

This is a reasonable sketch of the cost structure of Chapter 7 and Chapter 13 bankruptcies in Florida. Again, the full cost will ultimately depend on the exact nature of your situation. For reference, FFA charges $2,000 for a Chapter 7, and $3,500 for a Chapter 13. We offer installment payment plans for Chapter 7 cases, and we only require $500 up front for Chapter 13 cases. To learn more, give us a call at 786-668-6688 or visit our website at Financial Freedom Advocates.