What does it cost to file for bankruptcy?

It is hard to accurately respond to this question posed to us by email or phone due to the variables that drive the price, because when people ask how much it costs, we know absolutely nothing about them and without the answers to the variables, we cannot determine how much work it will be and therefore the price. For example, if your household income is below median, you are likely eligible for a chapter 7 bankruptcy, and there is an administrative order that has been issued by the court telling lawyers what the reasonable price is for a "standard" chapter 7 bankruptcy, but that does not include the court's filing fee, plus the classes required by law, which are different depending on the vendor you use for the classes. If your case is not "standard", the price could vary from this fee. For example, you may have a pending garnishment that is going to require a whole lot more work, and if so, we cannot just just charge you the standard fee, but have to charge you extra for the extra work extinguishing the garnishment is going to require. The standard fee does not include all the work of stopping the garnishment. Same thing where you want to modify a home loan, i.e. that entails all the work of a modification, which costs much more than the person who does not need that. If there are judgments from previous lawsuits, it is highly likely that those judgments have been entered in state courts, and are not in the same (federal) court where your bankruptcy must be filed. If they are pending collection lawsuits or judgments that should be extinguished, we may have to go to a different court (wherever your judgment was entered), and file documents in that court or even re-open the case where a judgment was entered to vacate it, and when you first call and ask how much to file for bankruptcy, we don't yet know whether you have pending collection lawsuits or the type of judgments we will have to go vacate, what states and counties those judgments are pending in, and how many you have, all of which determine the amount of extra work we must do on your behalf. Another time consuming project that causes the firm a lot of extra work is the self employed person who does not keep regular bookkeeping records. This person often cannot provide us with the data necessary for filing their case without a lot of extra work because they are unable to tell us the monthly income and expenses for the business in the months preceding the filing. We often must take extra time to educate the self employed person what we need and whey we need it and in what format for it to be filed within their case. We must charge more money for all the extra work this process entails. There are other variables that determine how much work your case will entail, and therefore how much we must charge. For example how much vehicles are you trying to keep upon which you are making payments? A new contract must be entered into for each such vehicle to protect you from losing it. Each one entails a certain amount of work, so the person with none of these is less costly in terms of time and thus fees, than the person who has multiple vehicles. Most chapter 7 debtors have 6 or 8 credit cards and less than $40,000 in credit card debt, but some debtors have dozens of credit cards and hundreds of thousands of dollars in unsecured debt. The one with more debt has a case that is more time consuming than the one who has less, and therefore the one with more debt requires the law firm spend more time, and we ultimately are charging for our time, so a higher fee is charged to compensate for the extra time involved in that case. Some people have lived in Florida for less than two years and call us to ask how much to file for bankruptcy whereas others have lived in Florida for years. The one who has lived in Florida for years will likely use the federal exemptions, whereas the one who has lived here less than two years may be using the state exemptions using laws from the state they recently live in, not Florida. This requires us to research the laws of another state to apply them to this debtor's case, and this extra work may cause the firm to charge for the extra time that will be required to handle the case appropriately.

If the debtor's household income is above median, the debtor may be ineligible for ch. 7 bankruptcy altogether and the standard fee for ch. 7 doesn't apply, because they aren't allowed by law( with limited exceptions) to file a ch. 7, but must instead file a ch. 13 which is an entirely different kind of bankruptcy that is twice as much work for the law firm as the ch. 7 filer. To illustrate, consider this: A chapter 7 often takes a few MONTHS from start to finish whereas most ch. 13 cases take five YEARS from start to finish. Chapter 13 cases cost roughly DOUBLE what a ch. 7 case costs, yet the debtor who emails or calls our office asking "How much to file for bankruptcy?" often does not know which type they need and innocently believes we can instantly give an answer without knowing anything about the debtors' income and finances. We cannot give an accurate answer without much more information, because they answer DEPENDS on the answer to many questions about these variables. (We could go back and forth in the emails to find out the answers, but then we'd have to charge extra for all the time that would take. This is not cost effective for you so we do not do this.) If anyone does give you an answer on the phone as to what it costs to file for bankruptcy, without knowing anything about the debtor's circumstances and finances, it is likely that number may change once the debtor arrives at the office and begins to reveal the circumstances (and thus the amount of work involved in representing them in their case). Some firms advertise just the court's filing fee without mentioning the attorney's fees, but this isn't much help, because the bulk of the cost is the fees, not the court's filing fee.

So let's say you email our firm and address all of the variables above in your email giving us a much better idea of what type of bankruptcy you need, and how much work is involved, will we give you a price then by email or phone? Probably not, because you see there are also people who call us to ask "How much for a bankruptcy?" without knowing that they don't even need bankruptcy! There are debtors for whom we can solve their debt problems without filing for bankruptcy at all! The method by which we bypass the bankruptcy filing is not well publicized because we don't give out our trade secrets in public forums, however, when you come in for your appointment to reveal all the variables we need to assess what services you need to solve your debt problems, and we see that your circumstances warrant this alternative, which costs only a small fraction of what a bankruptcy costs, we do disclose this option to you and quote you the very low price to accomplish it. In fact, with this alternative we can shift the "leg work" to you if you prefer which reduces our time and therefore our fees to save you money so we can keep it as cheap as we possibly can, only a few hundred dollars! If we were to respond to the phone call or email by quoting you a price for bankruptcy in response to your naked question "How much does it cost to file for bankruptcy?" we would miss the opportunity to assess your financial circumstances, determine the appropriateness for this alternative, and save you potentially thousands of dollars because you would be under the impression you needed a bankruptcy when you didn't even need one and could've done something a whole lot cheaper and just as effective!

In addition to all of this, the court's administrative order setting the price of bankruptcy for the "Standard" ch. 7 and ch. 13 cases CHANGES over time. Also, laws change over time, and then there's inflation over time. We now charge three times what we charge for bankruptcies over a dozen years ago due to these changes. What we could do a bankruptcy for before BAPCPA (a major revision in bankruptcy law about a decade ago) was much less than what we must charge now, because the law shifted a great deal of risk from the debtor to the lawyer and required the lawyer to do a LOT more work when filing bankruptcy than what was required before BAPCPA. So in response to your question "How much does it cost to file for bankruptcy?" We really really do want to give you a straight answer, but so far, the only way we have found to determine what the answer is is to have you come in for a quick appointment to access the big picture about your finances, access the amount of work your particular case will entail, tell you what options you have, and what the cost of each of those options will be, so you can decide the path you will choose.