How Does it Cost to File for Bankruptcy in Pennsylvania?
Anyone considering filing for bankruptcy has financial concerns. They are worried about paying their credit card bills, rent, or mortgage. Even though they could benefit from bankruptcy, they have questions regarding the cost of hiring an experienced attorney to handle their case. 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. However, 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 and other costs.
We understand that it is frustrating that financially struggling people must incur additional expenses to file for bankruptcy. Unfortunately, it is a part of the process. The cost includes attorney’s fees, court costs, education expenses, and other miscellaneous costs. However, the money you invest in bankruptcy is usually significantly less than you owe. It is a small price to pay for the peace of mind associated with a fresh financial start.
At Young, Marr, Mallis & Associates, our team of compassionate attorneys understand your financial concerns. While we will work with our clients, the cost of filing for bankruptcy is an unavoidable reality. To get an estimate based on your unique situation, call (215) 701-6519.
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.
There are different filing and administrative fees charged by the court depending on the chapter. For a Chapter 7 case, there is a filing fee of $245, an administrative fee of $78, and a trustee surcharge of $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 courts.
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.
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 through your bankruptcy plan, an additional $4,000 would be added for 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 does not require the same amount of work, such as reviewing claims or drafting a bankruptcy plan. Still, numerous factors could impact the cost of a bankruptcy 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.
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.
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 mortgage lender will likely file a motion for relief from stay to pursue a foreclosure action. 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. 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 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.
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.
If You Have Questions About Bankruptcy Costs, Call Our Pennsylvania Bankruptcy Lawyers
Our Allentown bankruptcy lawyers know you are financially struggling if you are thinking about bankruptcy. While there are costs involved with filing for bankruptcy, the investment is usually small compared to the benefits you receive. Discharging $50,000 of unsecured debt for $2,000 is a substantially better return than you would get if you attempted to negotiate with your creditors. While $3,500 to avoid foreclosure and keep your family home might seem like a small sacrifice. At Young, Marr, Mallis & Associates, we strive to make bankruptcy affordable and manageable. Call (215) 701-6519 to review your case.