Filing bankruptcy can give you a new lease on life. The debts that weigh you down and keep you from achieving your goals are eliminated, leaving you free to start again. Also, you may be able to keep your home, vehicle, retirement savings, and other protected property. But how can you afford the cost of filing for Bankruptcy when in financial distress?

Most bankruptcy cases are relatively inexpensive. Also, the money you save by eliminating onerous debts far outweigh the costs. Finally, the money you have been paying on dischargeable debts can go toward your legal fees.

Cost of Filing for Bankruptcy in Athens

Federal laws set the costs of bankruptcy fees, making them uniform in every state. Accordingly, Georgia courts charge petitioners a fee of $338 for Chapter 7 and $313 for Chapter 13.

Petitioners must pay the fee at the time they file unless the court grants an installment plan, which is available for both Chapter 7 and Chapter 13 bankruptcies. Also, courts can waive the Chapter 7 filing fee due to specific circumstances.

Applying for an Installment Plan in Athens

If you lack the funds to pay the filing fee in full but feel confident you can pay in increments, applying for an installment plan may be your best option. Applying for an installment plan requires completing the Application for Individuals to Pay the Filing Fee in Installments, known as Form 103A, where you may request to pay the fee in up to four installments and within 120 days of your filing date.

However, before applying for a Chapter 7 filing fee installment plan, consider whether you have eligibility for a fee waiver.

Who Qualifies for a Chapter 7 Fee Waiver?

The courts use several criteria, including a means test, to determine if you qualify for a fee waiver. You can file for no cost if you meet the following qualifications:

• You are an individual
• You are filing for Chapter 7 
• You are unable to pay the fee in installments over 120 days, and
• Your combined family income is under 150% of the official federal poverty line.

The U.S. Department of Health and Human Services publishes the official federal poverty line annually. For 2023, the federal poverty line for an individual is $13,590. The line increases for people with families. For instance, the federal poverty line is $27,750 for a family of four.

Note that even if you qualify under 150% of the federal poverty line standard, you still must pay the fee in installments if possible. For instance, if you have sufficient money in the bank to pay the fee, then the court won’t waive it even if you meet income requirements.

When completing the fee waiver form, you’ll need to provide accurate information under oath about your family size, combined family income, monthly expenses, cash savings, bank accounts, personal property, and real estate.

The information you need for the fee waiver is included on the bankruptcy schedules. Bankruptcy schedules are forms you fill out detailing your financial situation, including assets, liabilities, and income. Using the information contained on the schedules makes completing the form less time-consuming.

In addition, you must declare any monies you’ve paid or promised to pay an attorney or other professional for services related to the bankruptcy filing. Also, you must list any bankruptcies you filed in the previous eight years.

The form also contains a section where you can explain any other factors that make it impossible to pay the fee upfront or in installments. For instance, if you have large debts that cannot be discharged in bankruptcy, such as student loans or child support, or are suffering from a financial hardship due to a medical condition or disability.

Based on your situation, the court orders one of the following things:

• Grant the fee waiver
• Schedule the matter for a hearing
• Deny the fee waiver and order a payment schedule

Bankruptcy Attorneys’ Fees

How much a bankruptcy lawyer charges varies according to the type of case and location. A simple Chapter 7 is the least expensive and lawyers usually charge a flat fee. More complex Chapter 7 cases require additional time that can be unpredictable, so attorneys may charge by the hour.

Chapter 13 cases are far more complex, requiring extensive paperwork and court hearings over several years. But you generally pay Chapter 13 fees over time rather than at the outset.

A typical, simple Chapter 7 case usually runs between $1,200 and $2,000. Fees vary by attorney, firm, and location, so this range is far from a rule, but it represents a fairly accurate range.

Factors Affecting Chapter 7 Bankruptcy Lawyer Fees in Athens

When choosing a bankruptcy attorney, it’s important to consider experience, reputation, and how the attorney interacts with clients. You want a knowledgeable and well-regarded attorney who works for his client’s best interests and is there to help you navigate a difficult time in your life.

For obvious reasons, fees differ based on the area. As housing costs are very different in Atlanta versus Savannah, the cost of a bankruptcy attorney is higher in areas that are generally more expensive.

In addition to location, Chapter 7 attorneys fees differ based on the difficulty of the case. Simpler cases require less work on the part of the attorney. He may only need a short time to review your bills and income statements and prepare the bankruptcy paperwork.

Usually, you and your attorney need to attend a meeting of the creditors, which is a hearing where the court determines if you have any assets and creditors can raise objections.

For example, a simple case discharging just credit card debt requires the least time. The administrative work is minimal and credit card companies are unlikely to attend a meeting of the creditors. As unsecured lenders, they have virtually no chance of collecting any money or property in a Chapter 7 bankruptcy.

Several factors can increase the procedural steps needed to complete the bankruptcy. These additional steps require attorneys to spend far more time on your case, resulting in higher fees.

For example, your case may require additional bankruptcy documentation. This is often the case for business owners, whose income calculation is not as simple as referring to a W2 or 1099.

Also, if you own real estate, your attorney may need to prepare property value justifications. Because the amount of equity in your primary residence determines if you can keep it, you need an accurate justification to avoid a potentially nasty surprise. On the other hand, you never want to overestimate the value of the property and then lose out on some of the benefits of filing for bankruptcy.

Creditor objections can also consume additional time for your attorney. In cases involving only credit card debt, this is less likely to happen. However, if you have secured property, business debts, or personal debts, your attorney may need to battle with some of your creditors.

Simple Case Example

Many debtors have simple cases and can expect a flat fee at the lower end. For example, suppose you have one job with a W2, five credit card debts, and no assets except a car and basic household belongings. In this scenario, an attorney can quickly determine if you qualify for a Chapter 7 bankruptcy and file the case without extra steps.

Complicated Case Example

Complex cases require additional steps. For instance, suppose you are married but live in a separate residence from your spouse. Additionally, you have four children that split their time between the different homes.

In addition, you have multiple businesses, gambling winnings, and a delinquent mortgage about to go into foreclosure. These income, marital, and debt complications make the case more difficult.

Other common causes of complications in a bankruptcy case include tax debt, foreign real estate, and valuable personal and household property.

During a consultation, a bankruptcy attorney will interview you about your financial situation, determine any potential complications, and advise you on whether filing bankruptcy serves your best interests.

The Lawyer’s Bankruptcy Experience

Experience matters when hiring a lawyer. An attorney with years of experience is more valuable than one fresh from law school or new to bankruptcy practice. You want to know you are in good hands and that your case will proceed smoothly and you’ll achieve all objectives.

What If You Can’t Afford the Cost of Filing for Bankruptcy in Athens

This is a common question because people filing for bankruptcy are in financial distress. Paying legal fees can be challenging in the best of times and seem impossible when facing collections calls, property seizures, creditor lawsuits, wage garnishments, and other financially ruinous situations.

However, there are several strategies that can help you afford the Cost of Filing for Bankruptcy.

Cease Payment on Bills Eligible for Chapter 7 Discharge

If you plan to file a Chapter 7, then certain bills will be discharged in the bankruptcy. For instance, credit cards. By ceasing payment and diverting the money to legal fees, you can afford to file and rid yourself of those high-interest loans forever.

However, continue to make payments for things you wish to keep. For example, if you want to keep your apartment, house, or car, you’ll need to keep those accounts current.

Ask a Friend or Relative for a Loan

Your friends and loved ones understand the turmoil you are suffering, and many of them are willing to loan you money to get your bankruptcy case started. They also know you will soon have fewer bills, which makes it possible for you to repay them.

Search for Low-Income Rates

Some bankruptcy firms and legal aid programs offer reductions in the cost of filing for Bankruptcy if you’re suffering extenuating circumstances, are unemployed or are indigent.

Most people who file bankruptcy wish they had done so sooner. Often, concerns about the costs cause them to wait too long, costing valuable time. The majority of bankruptcy cases are relatively inexpensive, and the savings far outweigh the expenses.

Reach Out to A Lawyer Today in Athens

Morgan & Morgan offers Chapter 7 and Chapter 13 services at a reasonable price. Our bankruptcy team knows how to maximize the benefits of bankruptcy for our clients. Contact Morgan & Morgan for a consultation.

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