When considering the possibility of filing bankruptcy, one of the most common things to contemplate before beginning the process is how much it will ultimately cost to do so. This is an important question, and the answer will depend on a number of different factors, including the chapter of bankruptcy that you file, the nature of your financial circumstances at the time of filing, and the fee structure of the law firm that you retain to assist you. There are a number of other factors that can sometimes affect the cost of filing in certain circumstances, but these are the primary determining factors involved.
With regard to the first factor – the chapter being filed – the primary distinction lies in one of the fundamental difference that exist between Chapter 7 and Chapter 13 bankruptcy. Fundamentally, a Chapter 13 bankruptcy is a payment plan through which the individual who is filing will repay a portion of what they owe to their creditors in monthly installments, by making payments to an individual known as the bankruptcy trustee. The trustee is a federally appointed official who is responsible for overseeing the bankruptcy case, and in Chapter 13 filings, they are also responsible for making disbursements to creditors out of the funds paid into the bankruptcy.
The size of these payments can be influenced by a number of different factors, but a common theme among them is that the payments made into the bankruptcy will also compensate your attorney for their legal fee! Thus, the cost of a Chapter 13 differs somewhat from Chapter 7 in that the legal fee in Chapter 13 is typically not paid to the attorney directly. Conversely, in a Chapter 7 filing legal fees are typically paid directly to the attorney whether this be through up-front payment prior to filing, or through a payment plan that begins after the case has begun. Something to note is that regardless of whether a Chapter 7 or a Chapter 13 is pursued, the filing costs (including the court filing fee, cost of pulling a credit report and credit counselling) will usually be paid directly prior to filing.
Another factor that is relevant in determining the cost of filing is the financial circumstances of the individual who is pursuing bankruptcy. These factors can cover a wide breadth of area stretching from the nature of the debts owed to, to the total amount of these debts, to the amount of property owned by the person who is filing as well as any number of other things in-between. In a Chapter 13 filing these things may help to determine the size of the payments made into the bankruptcy, while in a Chapter 7 they may impact other things such as whether any payments must be made directly to the bankruptcy trustee, and if so, how much must be paid.
Lastly, another factor that will always be relevant is the fee structure of the attorney who is assisting you with the filing. At our firm, we strive to provide the best possible value for the fees that we receive and offer a wide range of services beginning with legal representation and continuing all the way to credit repair, to make sure that each of our clients gets the greatest amount of benefit possible from the bankruptcy process. To learn more about the specifics of what a bankruptcy filing may cost in your unique and personal set of circumstances, please feel free to reach out!
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Something to keep in mind when considering bankruptcy is that the benefits of pursuing a filing will substantially outweigh the costs associated with doing so, for the vast majority of people who find themselves dealing with the burdens imposed by unmanageable debt. To find out more about the benefits that bankruptcy can offer in your circumstances, please feel free to reach out! Our experienced and dedicated staff would be happy to meet with you and discuss how bankruptcy can be tailored to work for you. So, when the time is right, or when you are ready, please don’t hesitate to reach out to Minnesota’s most kind and helpful bankruptcy law firm by going now to www.lifebacklaw.com.
