How Does it Cost to File for Bankruptcy in Pennsylvania?

Anyone considering filing for bankruptcy is worried about paying their credit card bills, rent, or mortgage. You may have questions regarding the cost of bankruptcy. One of the first questions our Philadelphia bankruptcy lawyers are asked is, “How much will this cost?” The answer is not simple and depends on numerous factors.

On average, a Chapter 7 case ranges from $1,500 to $2,500, while a Chapter 13 bankruptcy could cost you anywhere between $3,500 and $4,000. These amounts include attorney’s fees, court costs, education expenses, and other miscellaneous costs. However, the money you invest in bankruptcy is usually significantly less than what you owe. It is a small price to pay for the peace of mind associated with a fresh financial start.

Call Young, Marr, Mallis & Associates at (215) 701-6519 for a private, free initial review of your case with our Pennsylvania bankruptcy lawyers.

Bankruptcy Costs in Pennsylvania

In nearly every bankruptcy case, your attorney’s fees will account for the bulk of your costs. However, there are some fixed costs associated with every bankruptcy filing.

Court Filing Fees

The court charges different filing and administrative fees depending on the chapter. For a Chapter 7 case, the filing fee is $245, the administrative fee is $78, and the trustee surcharge is $15, for a total of $338 in court costs. A Chapter 13 case has a filing fee of $235 and an administrative fee of $78 for a total of $313 in court fees.

Credit Counseling

Whether you file Chapter 7 or Chapter 13, you will be required to take a credit counseling course before filing and a debtor’s financial education course before you receive a discharge. The cost of these courses ranges from $9 to $50.

Trustee Fees

When you file a Chapter 13 case, there is an additional trustee fee that you will be required to pay. This fee is based on the total amount you are paying through your bankruptcy plan. While the percentage fluctuates year to year, on average, you will have to pay 10% of your total plan payments to the trustee. If you were paying your creditors $40,000 under your bankruptcy plan, an additional $4,000 would go to the trustee. This payment is included in your monthly bankruptcy payment.

Attorney’s Costs for a Pennsylvania Bankruptcy

Your attorney’s cost will often vary based on the chapter of bankruptcy and the case’s complexity. A Chapter 7 bankruptcy usually costs less than a Chapter 13 case. A Chapter 7 case is significantly shorter and requires less work, such as reviewing claims or drafting a bankruptcy plan. Still, numerous factors could impact the cost of a bankruptcy case.

Complexity of Your Case

If you work a nine-to-five job and are filing a Chapter 13 case because you are six months behind on your mortgage and only have some unsecured debt, your case is rather straightforward. However, if you own a roofing company, have multiple rental properties with various mortgage deficiencies, and owe back real estate taxes, your case is more complicated. The cost of bankruptcy increases if it presents complex legal issues.

Assets and Creditors

Other factors that could impact the cost of your case include cramming down the cost of a vehicle, stripping a second mortgage, or objecting to creditors’ claims. Some of these issues could be addressed during your initial consultation, while others might not be apparent until your case has progressed. The more assets and creditors involved in the case, and the more disputes you might have with creditors, the more expensive it may be for your attorney to handle your case.

Mistakes and Errors

There are also things you could do during the case that increase the cost. For example, if you fail to make your monthly mortgage payments, your lender will likely file a motion for relief from stay to pursue foreclosure. Depending on the circumstances, this could require a response and multiple court appearances.

Additionally, if you miss your bankruptcy plan payments, the trustee will file a motion to dismiss your case. This could also result in costly court appearances. Our Pennsylvania bankruptcy attorneys will discuss these issues and others during your initial consultation.

How Do You Pay for a Pennsylvania Bankruptcy?

How you pay for bankruptcy also depends on the chapter you file.

Chapter 7

All court costs and attorney fees must be paid before your Chapter 7 case is filed. Our Pennsylvania Chapter 7 lawyers offer payment plans, but you must be paid in full before your case will be filed.

Chapter 13

Chapter 13 cases are typically more expensive and work differently. While there is an upfront cost, including any court filing fees, a substantial portion of your fees could be paid through the bankruptcy plan. This allows you to spread the cost of your bankruptcy out over three to five years.

Fee Disclosures

The court also monitors bankruptcy fees. All bankruptcy attorneys must file fee disclosures and, in Chapter 13 cases, fee applications seeking the court’s approval.

FAQs About the Costs of Bankruptcy in Pennsylvania

How Much Does it Cost to File for Chapter 7 Bankruptcy in Pennsylvania?

When you file for Chapter 7 bankruptcy in Pennsylvania, the filing costs are $338. This includes filing fees, court costs, and some other miscellaneous fees. These fees may be adjusted over time, and you should ask your attorney about the cost of bankruptcy before you file.

How Much Does it Cost to File for Chapter 13 Bankruptcy in Pennsylvania?

When a person files for Chapter 13 bankruptcy in Pennsylvania, they have to pay total costs of $313. Like Chapter 7, this includes filing fees, court costs, and various other fees. Check with your attorney about costs before you file, as they may be adjusted over time.

Do I Have to Pay Bankruptcy Fees All at Once?

Generally, yes. The court will likely not accept your bankruptcy petition until the fees have been paid in full. If you believe you might have trouble affording the cost of bankruptcy up front, ask your lawyer about your payment options.

What Can Make Bankruptcy More Expensive?

Bankruptcy fees and costs may increase based on certain factors in your case. If your case is especially complex, involves multiple assets, or involves disputes with creditors, it may be more complicated and expensive. On top of that, mistakes like missing payments could lead to more costs.

What Do I Do if I Cannot Afford to Pay the Costs of Bankruptcy?

If you cannot afford to pay the fees to file for bankruptcy, your attorney can help you find legal options to help you. If you are filing for Chapter 7, you may have the filing fees waived if you can prove you cannot afford them. If you are filing for Chapter 13, ask your lawyer about how to pay the filing fees.

Is The Cost of Bankruptcy Worth It?

Yes. While filing for bankruptcy can be expensive, the benefits are often worth the cost. The value of the debts that may be discharged often outweighs the costs of filing for bankruptcy, and many petitioners feel that the costs are worth the advantages of bankruptcy.

What if I Miss a Bankruptcy Instalment Payment?

If you are on a payment plan under Chapter 13 bankruptcy and miss a payment, you might be in trouble. You may be in breach of your court-ordered payment plan. The court could dismiss the case, ending the automatic stay protecting you from creditors, leaving you subject to collections. It may be possible to go to court and seek forgiveness, but it will take time and cost more money.

If You Have Questions About Bankruptcy Costs, Call Our Pennsylvania Bankruptcy Lawyers

Call Young, Marr, Mallis & Associates at (215) 701-6519 for a private, free initial review of your case with our Pennsylvania bankruptcy lawyers.