The minimum cost for a Chapter 13 bankruptcy is usually $350. Exact filing fees vary in different jurisdictions. Additional fees apply for additional filings, like amended schedules or repayment plan modifications. The total cost of Chapter 13 varies based on the filing type, as outlined below.

Whatever the cost, Chapter 13 bankruptcy is usually worth it. This federal debt repayment program gives families and businesses up to five years to catch up on past-due mortgage payments and other secured debt delinquency. At the end of the protected repayment period, the judge discharges most unsecured debts, such as medical bills and credit cards. 

Additionally, there are some little-known loopholes in Chapter 13 that only an experienced Georgia bankruptcy lawyer knows how to effectively use. That’s the best way for your family or business to maximize the fresh start that the Bankruptcy Code guarantees.

Benefits of Bankruptcy

When lenders threaten foreclosure, repossession, and other extreme measures, bankruptcy stops these moneylenders dead in their tracks. Section 362 of the Bankruptcy Code makes all these things illegal. Creditors can only bypass the Automatic Stay if the judge grants special permission. And, if you have a Georgia bankruptcy lawyer in your corner, you also have an advocate who can keep that from happening.

Furthermore, a Chapter 13 repayment plan is an income-based plan. Bankruptcy debtors do not need to comply with the terms that moneylenders dictate. Bankruptcy means that these creditors must wait for payment, like everyone else.

Finally, as mentioned earlier, bankruptcy is a fresh start. As experienced Georgia bankruptcy attorneys, we know that there are some effective ways to raise your credit score following the bankruptcy legally. History is replete with individuals and companies who have filed for bankruptcy and gone on to scale financial and other heights they had only dreamed about. A Georgia bankruptcy lawyer can not only make these dreams come true, but also give you the tools you need to make them attainable.

Non-Lawyer Cost Options

Money is always tight during Chapter 13. That’s usually the reason people file in the first place. Therefore, to save money, some debtors look at do-it-yourself bankruptcies or bankruptcy petition preparers. But as the old saying goes, these moves are often penny-wise and pound-foolish. These efforts usually end up costing much more than they save.

DIY bankruptcy is a tempting option. After all, many debtors reason, I do my own taxes, and filing bankruptcy is essentially filling out forms. So, why on earth do I need a Georgia bankruptcy lawyer?

There are indeed many bankruptcy forms to fill out. But unlike federal income taxes, bankruptcy forms do not include instructions. Furthermore, if you hit a snag, there is no 800 number to call for free advice. Also, because bankruptcy is a legal proceeding, judges require DIY filers to have the same knowledge as Georgia bankruptcy lawyers.

Additionally, adverse actions, like motions for turnover and motions for relief from the Automatic Stay are fairly common in Chapter 13s. Creditors almost always have lawyers representing them. If you do not have your own advocate, it’s almost impossible to overcome those odds.

Some people appreciate the risks of a DIY bankruptcy, but they still want to reduce Chapter 13 costs. So, they work with a non-lawyer bankruptcy petition preparer.

If the bankruptcy was only filling out forms, such an arrangement might be a good idea. But as explained above, that’s not the case. Bankruptcy is a legal proceeding, just like going to court if you are accused of murder.

Furthermore, bankruptcy petition preparers usually do not know about the aforementioned loopholes. They are legally barred from discussing them with you even if they know about them. Bankruptcy petition preparers can fill out forms and take your money. That’s it. The only way to maximize your chances of benefiting from filing bankruptcy is by working with a seasoned Georgia bankruptcy lawyer.

Bankruptcy and Georgia Bankruptcy Lawyers

If you go to court over a traffic ticket, you probably do not need an attorney. But for a legal proceeding like a bankruptcy, where your financial future is at stake, you need a Georgia bankruptcy lawyer.

Only attorneys can give legal advice and represent people in court. Furthermore, only Georgia bankruptcy lawyers know about some important shortcuts in Chapter 13.

Vehicle redemption is a good example. Assume Chris owes $4,000 on a vehicle that’s only worth $2,000. If a Georgia bankruptcy lawyer files the proper motion and Chris pays the lender the car’s fair market value, Chris might own the vehicle free and clear, saving $2,000 in the process.

Paying Bankruptcy Fees

When you file a bankruptcy petition, the fees are due when the petition or pleading is filed with the Bankruptcy Court. Lawyers filing the petition electronically must handle the costs using pay.gov. Beginning in January 2022, bankruptcy payments are no longer taken with cash payments. Instead, fee payments should be made with attorney’s checks, money orders, or cashier’s checks.

The court accepts online payments for filing fees and fees owed to the court for motions, amendments, or copies for Chapters 7, 11, 12, and 13. The online system accepts debit cards and PayPal payments. You must have the following information to use the online system for fee payments:

• Case number
• Bankruptcy style
• Document number
• The total amount you are paying

There must be a separate form for each case number. Those who don’t have the detailed information they need can contact the clerk’s office to get the information they need. Before you pay for any copies, you must first submit a request online or by phone and get the final cost of the documents you need.

It should be noted that the online payment site is not for Chapter 13 plan payments. Those payments should be directed to the Bankruptcy trustee assigned to your case. Often, trustees will have an online method of paying, but it’s necessary to contact them to learn how they accept payments for your Chapter 13 plan.

Attorney’s Fees for Chapter 13 Bankruptcy

Another aspect of the cost of filing for Chapter 13 bankruptcy is the attorney’s fees. The national average attorney’s fee for a bankruptcy filing is $3,000. Local jurisdictions help to determine what is considered a reasonable attorney’s fee for a Chapter 13 case. The complexity of the case determines those reasonable fees.

Usually, attorneys use the presumptively reasonable fee for the guideline for their charges. If an attorney’s fee is the same as or less than the guideline, judges don’t need to review the fee, which leads to those fees being called “no-look” fees. However, if the fee exceeds the recommended reasonable fee, the judge can order that the attorney refund a portion, or all, of the fee.

An attorney in a Chapter 13 case often charges a partial fee before officially filing the petition. The remainder of those fees is added to the court-approved repayment plan. That means that the bankruptcy trustee puts a portion of your regular Chapter 13 payment toward the payment of your attorney.

Some circumstances can cause the cost of a bankruptcy filing to increase. As the case becomes more complex or requires additional court appearances, fees could grow along with the complexities.

Factors That Can Increase Bankruptcy Fees

Several factors can cause bankruptcy fees to increase. Here are some of them:

• Filing both a business and a personal bankruptcy
• Whether you are filing with or without your spouse
• Having multiple income sources
• Non-exempt assets
• Numerous or unusual assets
• Earning more than the median income for your household size
• Having a lot of creditors
• Having a previous filing within eight years
• Trying to stop other legal actions: foreclosure, eviction, levies, repossessions
• Accusations or potential accusations of fraud
• Non-dischargeable debts: student loans, alimony, child support, tax arrearage

Bankruptcy Education Courses

One fee that is often overlooked is the cost of credit counselling. Petitioners in both Chapter 7 and Chapter 13 cases must complete credit counselling courses before filing and again right before the bankruptcy is discharged.

The credit counselling must be arranged by a nonprofit credit counselling agency the US Department of Justice has approved for your district. The Office of the US Trustee sets the fees for the courses, and that office oversees the requirement to attend counselling.

Usually, the fee for credit counselling courses ranges from $10 to $50. Occasionally, you can find a course that’s offered without a charge. These courses can be taken online, in person, and sometimes by telephone.

The law recognizes that financial difficulties bring you to bankruptcy in the first place. So, if you can’t afford credit counselling, the agencies must offer a reduced rate or free courses.

How to Pay for a Bankruptcy

The need to file for bankruptcy protection means you have fallen on difficult financial times. To add insult to injury, you must also pay for the bankruptcy proceeding. When filing Chapter 13, you can structure a repayment plan for your debts, and at least a portion of the attorney fees can often be rolled into that repayment plan. However, you usually must pay a part of the attorney fees upfront.

If you are struggling to pay the upfront portion of the attorney fees, there are some ideas for how you can pay that portion.

1. Raise the money. You can reduce how much you are paying out. For example, if you’re paying your credit cards, stop. Instead, put that money toward filing your bankruptcy. Additionally, you can try to earn extra cash by selling unused items in the home or taking a second part-time job.
2. Work out a payment plan before you file. Have an honest discussion with your attorney about your situation. Some attorneys offer payment options for their fees to help you. After all, you wouldn’t need their services if you were made of money.
3. If you have income that comes in at 150% or less of the poverty level for your household size, you could qualify for pro bono legal services. However, not all attorneys offer these services, so if you need them, you must discuss them in your preliminary consultation meeting.

While bankruptcy can be expensive, you can find ways to pay for it. You may need to be creative or discuss your options with your attorney.

Consult a Reputed Georgia Bankruptcy Attorney Today!

Not every Chapter 13 bankruptcy costs the same amount of money. For a free consultation with an experienced Georgia bankruptcy lawyer, contact Morgan & Morgan, Attorneys at Law, P.C. on (706) 843-2905. Convenient payment plans are available.

Related Content: How Much Does a Chapter 13 Bankruptcy Cost in Athens

Original article revised on Jan 13, 2023