If you're considering bankruptcy because you can't pay your debts, you may be concerned about what it will cost. The basic fee to file your bankruptcy papers is several hundred dollars. If you decide to handle the case on your own, you may want to consult a self-help book, which will set you back another $30 or so. If you decide to hire a lawyer, the costs will increase significantly. This could be money well spent, however, if you have a complicated case, you anticipate a dispute with a creditor, or you simply aren't comfortable proceeding on your own.
You must pay a filing fee to the court when you file your bankruptcy forms. Currently, the fee is $306 to file for Chapter 7 bankruptcy and $281 for a Chapter 13 bankruptcy case.
If you can't afford to pay the whole fee at once, you can apply to pay in installments by completing Bankruptcy Form 3A, Application to Pay Filing Fee in Installments. You can pay in up to four installments over 120 days. If you have trouble coming up with a payment when it's due, you can ask the court for an extension. However, you must make all of your payments within 180 days of filing for bankruptcy.
If you can't afford to pay the fee at all, you can apply for a fee waiver by completing Bankruptcy Form 3B, Application for Waiver. (This option is available only in Chapter 7 bankruptcy, not Chapter 13.) This form is complicated and long; it asks you to provide fairly detailed information about your finances and expenses.
If you apply to pay in installments or to waive the fee, you will have to appear before the judge to explain why you can't afford to pay the whole fee at once. This hearing will generally take place a few weeks after you file your paperwork. If you are applying for a waiver, be prepared; judges are more reluctant to grant a total waiver than a request for installment payments.
Getting Help With Your Bankruptcy
The basic forms you'll have to file in a Chapter 7 or Chapter 13 bankruptcy case are available free online. If you need help completing them, however, you'll have to pay for it. Some of the available options include using a self-help resource; hiring a bankruptcy petition preparer to help you fill out the forms; or hiring a lawyer.
For about $30, you can buy a self-help book to help you prepare your bankruptcy forms and get your discharge. Nolo has resources available for filers who want to do it themselves: How to File for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy: Keep Your Property and Repay Debts Over Time.
Bankruptcy Petition Preparers
If you need help with routine form preparation and organization, a bankruptcy petition preparer can help. These professionals are only allowed to complete your forms with the information you provide, however; they cannot advise you on what to put on your forms. In essence, they are supposed to act as typing services. Because petition preparers can't give advice, they will be useful only if you have decided how to complete your forms and need someone to manually fill them in and organize them for you in the order your local court expects. For this service, you can expect to pay from $100 to $200.
In a basic Chapter 7 case, you can expect to pay a lawyer a couple of thousand dollars; lawyers charge more for Chapter 13 cases, which require more time to complete the repayment plan. This might seem like a lot of money to come up with, especially if you're already deeply in debt. But there are plenty of situations in which hiring a lawyer could make the difference between having your case run smoothly and your debts discharged, or digging yourself into deeper trouble.
For example, if you want to file for Chapter 7 bankruptcy but your income is relatively high, you may want a lawyer's help to convince the judge that you shouldn't be forced to use Chapter 13 instead. You may have debts that won't be discharged unless you convince the judge that they should be, such as tax debt or student loans. Or, a creditor may challenge your right to have certain debts discharged. In any of these situations, having professional help in making your case will be valuable.
In some situations, you may just feel more comfortable having someone else handle your case, even if that help comes at a price. If you have valuable property you want to keep, you are afraid of losing your home, or you simply don't feel up to completing all of the paperwork, a bankruptcy lawyer can help you make sure you haven't missed anything.