Filing for Chapter 7 or Chapter 13 bankruptcy isn’t free but you may be able to get your fees waived.
Bankruptcy is designed to help you get out of dire financial straits caused by overwhelming debt, but just like it “takes money to make money” it takes money to save money through bankruptcy. In addition to the fees you must pay for the expert services of your bankruptcy attorney, you will also be expected to pay certain administrative and filing fees, as well as a fee for credit counseling and debtor education. These fees are relatively small compared to the amount of debt you are likely to be discharging, so for most people bankruptcy is still an excellent investment. This will still hold true even after the fee increase which will take place on June 1, 2014.
Filing & Administrative Fees
As a result of a decision from the Judicial Conference of the United States, the adversary filing fee will increase from $293 to $350 and the administrative fee will increase from $46 to $75 on June 1. If you cannot pay these fees due to the same financial hardships that are driving you to seek bankruptcy in the first place, you have two options.
First, you may request permission to pay your fees in installments. You basically just need to file a Form 3A, which allows you to propose a payment schedule consisting of no more than 4 installments and lasting no more than 120 days.
As another option, you may attempt to have the fees waived by requesting a fee waiver from the court. This will only be possible in Chapter 7, not Chapter 13, because in a Chapter 13 bankruptcy you are presumed to have enough money for a repayment plan and therefore also for your fees. If you are filing Chapter 7, you may be able to get a fee waiver if you can prove that you are unable to pay in installments and your income is 150 percent below the poverty line.
Additional Costs
Before filing for bankruptcy, you are required to complete credit counseling. This typically costs about $50. If your bankruptcy petition is accepted and your debts discharged, you will also have to take a debt education class for another $50. Because these courses are required by law, the providers have to allow you to take them even if you can’t pay the fees. You may be able to request a reduced fee or even a fee waiver if you can’t afford the classes.
