How much does it cost to file a chapter 7 bankruptcy?
Short answer: there are two fees you will have to pay—attorney's fees and the Court filing fee.
1. Attorney's fees: depends on the complexity of your case but usually between $900 and $1,800.
2. Court filing fee: $335.
Whenever I shop on Amazon and I do a search for a particular product, the first thing I notice is the rating of the product. I need (want) to buy quality stuff! The very next thing I look at is the price. If the price isn't in the range I think I should be paying then I can easily dismiss the product and move on, period. I don't need to take any more time analyzing the product.
Price is an important factor to consider when filing for bankruptcy. If you are considering filing for bankruptcy that means funds are already tight.
As I mentioned above, there are two fees associated with filing a chapter 7 bankruptcy—attorney's fees and the Court filing fee.
The attorney's fees are determined by the attorney or the firm he/she works for. Because bankruptcy attorneys cannot collect their fees after the client has filed for bankruptcy, this means that most attorneys will quote you a flat fee. This differs from the general billing practice which most areas of law, and lawyers, use, which is an hourly rate.
The amount of time I spend on each bankruptcy case varies. Some cases are fairly simple and I only spend a few hours on the case. Other cases are much more complex and require much more time to meet with the client, communicate to the client about the issues that need to be addressed, prepare the bankruptcy statements and schedules, draft additional motions, and attend additional meetings (i.e. extended 341 Meeting of Creditors, 2004 Examination). Because of this, I hesitate (as do most other bankruptcy attorneys) to simply quote a price over the phone without knowing much about the case.
That being said, if I do not foresee many problems arising in your case (and I would say a good 70% of cases fit into this category) I charge around $1,200 (at the time of this writing) for attorney's fees. I used to charge less when I was young warthog because I was hungrier for business. After I got some experience under my belt, I am much better now at estimating how much time each case will take me.
In Utah I have seen attorneys charge as low as $800 and as high as $3,000 for a chapter 7 bankruptcy, but both of these are outliers. For your standard run-of-the-mill chapter 7 bankruptcy in Utah I would say most attorneys charge between $1,100 and $1,800. I always tell my clients that they can call around and get quotes from other attorneys. I probably shouldn't do that, as it is definitely not in my financial best interest to do so, but I absolutely hate making my clients feel pressured.
The Court filing fee is far less complicated. Every chapter 7 in every state of the union (because bankruptcy is federal law) the filing fee is $335.
In total you are looking at spending between $1,500 and $2,200 total on a chapter 7 bankruptcy. You can file a bankruptcy without the help of an attorney but I would not recommend it (see here and here).
Posted by Sean Wood