Most individuals who file for bankruptcy do so under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code.
Chapter 7 bankruptcy discharges most debts after filers sell off certain assets and use the proceeds to repay their creditors. Chapter 13 bankruptcy wipes out most after debtors pay a controlled portion of what they owe over a period of three to five years.
If you’re considering filing for bankruptcy in Iowa, it’s important to understand the differences between the costs of filing for Chapter 7 and Chapter 13 bankruptcy.
Bankruptcy Filing Fees
- Chapter 7 bankruptcy – A $245 court filing fee, a $78 administrative fee, and a $15 trustee fee surcharge, for a total of $338
- Chapter 13 bankruptcy – A $235 court filing fee and a $78 administrative fee, for a total of $313
If you can’t pay these fees upfront, the court might allow you to pay them in installments. You could even apply to have the fees waived entirely if your household income when you file is below 150 percent of the federal poverty.
Bankruptcy Attorney Fees
In general, attorney fees make up the bulk of the cost of filing for bankruptcy. According to Debt.org, the average costs of bankruptcy attorney fees include:
- Chapter 7 bankruptcy – Chapter 7 attorney fees often range from $1,000 at the low end to $1,750 at the high end. The national average in 2016 was $1,450.
- Chapter 13 bankruptcy – Chapter 13 attorney fees often range from $2,500 at the low end to $5,000 at the high end. The national average in 2016 was $3,000.
Additional Bankruptcy Fees
In addition to filing and attorney fees, you may also need to pay for:
- Credit counseling – For both Chapter 7 and Chapter 13 bankruptcy, you must attend two credit counseling courses, online or in-person, at your own expense. Typical course costs range from $10 to $50.
- Credit reports – You will likely need to provide a credit report when you file. You may be able to obtain your report for free, but free versions are typically incomplete and available only once per year. Purchasing a full credit report usually costs around $20 or $30.
- Court costs – If there are any issues with your case or you need to convert your filing from one chapter to another, you might be responsible for additional court and attorney fees.
How to Pay for Bankruptcy
The method of payment for bankruptcy depends on the type of bankruptcy you file:
- Chapter 7 bankruptcy – Filing fees for Chapter 7 cases are typically due as soon as you file your petition, and attorney fees are due before you file.
- Chapter 13 bankruptcy – In Chapter 13 bankruptcy, you pay your debts through a repayment plan over time, and attorney fees are often included. When you make monthly payments to the bankruptcy trustee, they’ll allocate a portion of those payments to your attorney fees.
Contact a Bankruptcy Lawyer Today
To learn more about the costs of filing for bankruptcy and whether it’s the right choice for you, contact the experienced bankruptcy attorneys of Telpner Peterson Law Firm, LLP, for a thorough case review.