Filing for bankruptcy can offer a crucial lifeline when you’re burdened by overwhelming debt. It provides a chance to eliminate unsecured debts and begin anew financially. However, navigating the bankruptcy process involves costs, including attorney fees and court filing fees, which can be daunting for individuals already facing financial hardship. This guide provides an in-depth look at the expenses associated with filing for bankruptcy, focusing specifically on “How Much Does A Bankruptcy Lawyer Cost”.
Court Filing Fees for Bankruptcy
Regardless of whether you choose to hire a bankruptcy lawyer, the court filing fee is a mandatory expense. This fee covers the operational costs of the bankruptcy court. Compared to other types of court cases, bankruptcy filing fees are relatively high. As of the latest updates, the filing fees are:
- Chapter 7: $338
- Chapter 13: $313
These fees must be paid to the Clerk of the Bankruptcy Court either upon filing the bankruptcy petition or within seven days thereafter. Failure to pay the fee will result in a notice from the Clerk’s office, and ultimately, the dismissal of your bankruptcy case.
Waiver of Filing Fee in Chapter 7
For those with extremely limited financial resources who cannot afford the Chapter 7 filing fee, it’s possible to request a waiver from the Court based on demonstrated financial need. This involves completing and submitting a fee waiver application form soon after filing the bankruptcy case. Qualification for a fee waiver hinges on strict income thresholds. It is important to note that fee waivers are not available for Chapter 13 bankruptcies.
How Much Do Maryland Bankruptcy Lawyers Charge?
Bankruptcy proceedings can be intricate, making legal representation highly beneficial. Bankruptcy lawyers typically charge flat fees based on the type of bankruptcy – Chapter 7 or Chapter 13. While fees are generally consistent, more complex cases may incur higher costs.
It’s crucial to note that the bankruptcy attorney’s fee usually doesn’t include the court filing fee. Therefore, if an attorney charges $1,200 for a Chapter 7 case, the total cost would be $1,538 (attorney’s fee plus the $338 filing fee).
Average Bankruptcy Lawyer Fee for Chapter 7 Bankruptcy
In Maryland, the average attorney fee for a Chapter 7 bankruptcy ranges from $1,000 to $1,500. Some lawyers may offer services for less. For example, at least one bankruptcy lawyer in Baltimore advertises Chapter 7 fees as low as $600. On the higher end, some attorneys charge up to $2,500. However, most Maryland lawyers charge around $1,200 for Chapter 7 cases.
To ensure transparency, the bankruptcy code mandates that debtors file a Disclosure of Compensation, detailing the fees paid to their bankruptcy attorney.
The following table illustrates fees disclosed in Chapter 7 cases filed in Maryland during the first week of May 2023:
| AMOUNT OF FEE | LAWYER |
|---|---|
| $1,500 | Jeff Sirody |
| $1,000 | Nicolas Del Pizzo |
| $2,700 | Ronald Drescher |
| $1,500 | Antonios Heper |
| $1,200 | Timothy Chambers |
Average Bankruptcy Lawyer Fee for Chapter 13
Chapter 13 bankruptcy attorney fees are generally higher than those for Chapter 7 due to the increased complexity and workload involved. Chapter 13 cases often require triple the effort from the attorney. Furthermore, Chapter 13 fees are structured differently, with an upfront payment and the remaining balance paid in installments through the Chapter 13 repayment plan.
The standard attorney fee for a Chapter 13 bankruptcy in Maryland is around $6,000. This is largely influenced by a pre-set maximum amount agreed upon by Chapter 13 Trustees and the Bankruptcy Court.
The upfront payment typically ranges from $1,200 to $2,000, with the remaining amount incorporated into the monthly repayment plan.
The following table illustrates Chapter 13 fees charged (both upfront and through the plan) in several Chapter 13 bankruptcy cases filed in Maryland during the first week of May 2023:
| TOTAL FEE / PAID UPFRONT | LAWYER |
|---|---|
| $6,000 / $2,000 | Bennie Brooks |
| $6,000 / $1,500 | Michael Coyle |
| $6,000 / $1,500 | James Logan |
Conclusion
Understanding the costs associated with filing for bankruptcy, particularly “how much does a bankruptcy lawyer cost,” is crucial for making informed decisions. While court filing fees are unavoidable, attorney fees can vary based on the complexity of the case and the type of bankruptcy filed. Weighing these costs against the potential benefits of debt relief can help you determine the best course of action for your financial future. If you’re considering bankruptcy, consulting with a qualified bankruptcy attorney in your area is highly recommended to get personalized advice and a clear understanding of the potential costs involved.
