What will it cost to file bankruptcy?

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What will it cost to file bankruptcy?

by: Deborah Beeksma

Thinking about filing for bankruptcy? There are

significant upfront costs. The purpose of this

article is to give you a general idea of what to

expect.

Your minimum cost will be around $350 if you

prepare your own forms that you download

for free from the courts. These forms are

complicated and will take a long time to

complete.

COST #1 - CREDIT COUNSELING CERTIFICATE & BUDGET

Budget: $50-$60

One of the first things that you will need to do is

to contact a court-approved credit counselor.

Counseling sessions take anywhere from 45 minutes to

2 hours. Following this counseling, you will receive

a certificate and budget which must be filed with the

court along with your bankruptcy paperwork.

This has to be done within six months before filing

your bankruptcy petition. Many of counseling

services offer on-line or telephone counseling.

If you have a lawyer, sometimes the fee is

part of the cost charged by your attorney.

In some cases, this fee can be waived

waived or reduced.

COST #2 - PREPARING YOUR BANKRUPTCY PETITION

Budget: $0 - $800 +

A. Bankruptcy Lawyers

With the complexities of the new bankruptcy

laws, you are wise to hire an attorney. The

problem is that the reform bill has made

bankruptcy so complicated that attorneys have

had to raise their rates. On the low end,

I have found some attorneys who charge approximately

$800. More likely, you are looking at $1,500

to $2,500 in attorney fees.

Some attorneys will let you pay their fees in

installments. If the installments are through

a financing house, find out what the interest

rate is!

There may be pro bono (free) services

available. Check with your State Bar

Association to see if there are any attorneys

who will handle bankruptcy petitions on a

pro bono basis.

B. Document Preparers or Paralegals

If you cannot afford an attorney but are nervous

about preparing your own form, a document preparer

or paralegal can help. Plan on around $200-$400 for

these services. Document preparers cannot

give you legal advice or represent you in court.

C. Debt Relief Agency

Attorneys, document preparers, or anyone else

engaged in the business of preparing and/or

filing bankruptcy forms are considered to be

"debt relief agencies," as defined in the Code.

A debt relief agency is required to tell you

upfront what work will be performed and what

exactly it will cost.

D. Bankruptcy Forms and Software

"Fillable" forms range from $0.00 (provided by the

bankruptcy courts with minimal instructions) to

approximately $700.00. You really should

hire an attorney, but if you cannot afford one,

many of the forms offer step-by-step guidance,

sort of like income tax software that you may

have used. You can find some good software

packages for under $50.

E. Court Filing Fees

Plan on at least a $250-$300 court filing fee.

Check with your local bankruptcy court to get the

exact figure.

COST #3 - MORE TO THE CREDIT COUNSELOR

When it's all said and done, you need to get a

"pre-discharge bankruptcy education certificate."

The average cost is $50.

~~~~~~

This article is not intended to be legal advice, but

a simple guide to help you budget and plan for a

bankruptcy filing. You can find links to the courts,

court-approved credit counselors, attorney searches

and affordable software packages at:

http://www.bankruptcy-filing.com

About The Author

Deborah Beeksma

For over 20 years, Deborah has worked as a paralegal for large and small firms. http://www.bankruptcy-filing.com is one of the websites she developed due to client demand.

webmaster@bankruptcy-filing.com

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