Tag: Court Filing Fee

What are my options for paying my bankruptcy filing fee?

Posted on by Sean Wood in Bankruptcy, Chapter 13, Chapter 7, Court Filing Fee, Fee Waiver, Fees, Filing for Bankruptcy

Short answer: (1) pay in full, (2) pay in installments, or (3) apply for a fee waiver.

1. Pay in full21 Cash Register

This is the easy option for both me and for the client. When you make a payment to my firm for the attorney’s fees you also make payment for the filing fee. Paying in full makes it easier for me because I don’t have to worry about reminding the client to pay the filing fee. It’s also easier for the client because there is nothing else you have to do.

2. Pay in installments

Coming up with the money for attorney’s fees can be difficult when you are considering bankruptcy. Fortunately, the Court allows you to pay the filing fee in three installments. You don’t even have to pay the first installment when you file.

What the Court does require is that you make your first payment two weeks within two weeks of filing, the second payment within two weeks after the first payment, and the third payment within four weeks of the second payment.

Let me use an example. Let’s say you filed chapter 7 bankruptcy on Monday, February 1, 2016. The total amount for the filing fee is $335.00. Your first payment is due on or before February 15, 2016. Your second payment would be two weeks after that, on Monday, February 29, 2016, Leap Day (watch out for Leap Day William). Your third and final payment would be due four weeks later on Monday, March 28, 2016.

Below is a table showing how this works.

Payment Date Amount
File Bankruptcy February 1, 2016 $0.00
1st Payment February 15, 2016 $110.00
2nd Payment February 29, 2016 $110.00
3rd Payment March 28, 2016 $115.00

3. Apply for fee waiver

The last way to pay for your filing fee is to not pay at all. If you meet the guidelines then you file what is called the “Application to Have the Chapter 7 Filing Fee Waived”. This is only available to chapter 7 debtors; it is not available to chapter 13 debtors.

There are several factors the Court considers when deciding to grant or deny your application for fee waiver. The most important factor, however, is your income. If your monthly income is 150% or less of the poverty level for the number of people in your household then the Court will likely grant your application for fee waiver. I covered this in more detail in an earlier post.

Talk to your attorney about which payment method is best for you.

How do I pay my bankruptcy filing fee to the Court?

Posted on by Sean Wood in Bankruptcy, Court Filing Fee, Fees

How do I pay my bankruptcy filing fee to the Court?

Short answer: pay by phone or pay in person at the bankruptcy court.

20 Court

When I meet with new bankruptcy clients I always give them a few documents that explain several things. I get asked a lot of repeat questions and most of the answers to these questions can be found on the documents I give to my clients. One of those questions that I get frequently is how do I pay my filing fee?

There are two ways to pay your filing fee:

1. Pay by Phone

You can call the Court on the phone and pay by debit card. The Bankruptcy Court phone number is 801-524-6687.

2. Pay in Person at the Court

You can go to the Courthouse and pay in person. The Bankruptcy Court Clerk’s office is located on the 3rd floor. The address is listed below.

Frank E. Moss, U.S. Courthouse
350 South Main Street, #301
Salt Lake City, Utah 84101

I always tell my clients that it is their responsibility to pay the filing fee. If you do not pay the filing fee on time then the Court will dismiss your case. Once your case is dismissed you can file again but your attorney might ask for more fees because it will take him more work. You will also have to pay the filing fee in full again.

It is your responsibility—not your attorney’s—to pay the filing fee. Save yourself, and your attorney, a headache and pay your filing fee on time.

How much does it cost to file a chapter 13 bankruptcy?

Posted on by Sean Wood in Bankruptcy

Short answer: typically around $500 to $800 to get things rolling.

16 Chapter 13

I am going to split this question into two sections. First, I will discuss how much money you will need upfront to file. Second, I will discuss how much money you will pay in total over the course of your chapter 13 plan.

Upfront Costs

The bulk of what a bankruptcy attorney will earn on a chapter 13 plan is earned through chapter 13 plan payments (an amount you will pay every month to the chapter 13 trustee) which take place over a three-year or five-year period. Because of this, your bankruptcy attorney doesn’t necessarily need any money upfront because he will get paid through the plan. But he is also taking a risk on getting paid because he may or may not be able to confirm your case. You will sometimes see attorneys advertise a “no-money-down” chapter 13 and these are the attorneys that will get paid solely through plan payments. You will still need to pay the Court filing fee but this can be paid in installments after you have filed.

Many attorneys, however, have a different approach. Many chapter 13 attorneys will require between $500 and $800 to get your chapter 13 filed. Part of that amount, $310 to be exact, will be used to pay the Court for the filing fee. The rest of it will be used as attorney’s fees to cover the attorney’s risk just in case your case doesn’t get confirmed so he will at least be able to earn something.

Total Amount Paid Through Plan

I bet most people who file for chapter 13 don’t know how much their attorney will make through the plan, although this is disclosed on the bankruptcy petition. In 2010 the presumptive fees for chapter 13 cases were set by the bankruptcy court. Here is the breakdown from the court’s website.

$3,000.00 – in below median income cases with $150/mo payments for 36 months or less

$3,250.00 – in all other below median income cases

$3,500.00 – in above median income cases

This amount will be paid to your bankruptcy attorney over the course of three or five years.  The trustee will also get paid about 10% of the total amount of payments you make which can range from a few hundred dollars to a few thousand dollars.

If your plan is not returning any money to unsecured creditors (the lowest amount you can pay) and you have a three-year plan then you will pay around $3,300.00 over 36 months which equals out to just under $100 a month. That is the bare minimum you will have to pay.

If you have tax debts or other priority or secured debts then your plan payment, and consequently the total amount that you will pay, will be more.

While this might seem like a lot of money, especially for those filing for bankruptcy, it does take quite a bit of time for a bankruptcy attorney to confirm a chapter 13 case. And the chapter 13 monthly plan payments are almost always easier to make than the alternatives.

How much does it cost to file a chapter 7 bankruptcy?

Posted on by Sean Wood in Bankruptcy, Chapter 7, Court Filing Fee, Fees

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.

Money

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).

How do bankruptcy attorneys get paid?

Posted on by Sean Wood in Bankruptcy

Short answer for chapter 7: bankruptcy attorneys get paid in full by the debtor before the case is filed.

Short answer for chapter 13: bankruptcy attorneys get paid through the chapter 13 plan.

Better Call Saul

This is a common question I get and it is understandable why people would be confused by this. This question comes to me somewhat like this: “How can someone who needs to file for bankruptcy afford to pay an attorney? Attorneys are expensive!”

In a chapter 7 bankruptcy there are two fees you must pay: the attorney’s fees and the Court filing fee. Many firms, including my own, require that the attorney’s fees be paid in full before we file the bankruptcy petition.

People contemplating filing for bankruptcy are usually paying bills to unsecured creditors or the wages are being garnished. When you file a bankruptcy all those payments stop. I advise people to stop paying their credit card bills or medical bills and instead pay me.

In a chapter 13 there are also two fees that you must pay: the attorney’s fees and the Court filing fee. Each case is a little bit different but generally chapter 13 attorneys require between $400 and $800 upfront. This will cover the Court filing fee and will compensate the attorney for some of his time. The rest of the attorney’s fees are paid through the chapter 13 plan.