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Bankruptcy Fees: How Much Does Bankruptcy Cost?
Last Edited: 1/10/2012
How much does bankruptcy really cost? That's a natural question. In
keeping with our policy of honesty and transparency, we don't make you jump through hoops to
find out.
Chapter 7
As of 2012, attorney fees in Eastern Massachusetts for consumer bankruptcy cases
range from about $1,000 to $2,500, not including costs. The
largest cost is the court filing fee of $306. The remainder of the costs are
typically minimal, and include a credit counseling certificate ($30-50) and
perhaps a credit report ($20-30).
We typically charge $1,500 for standard consumer Chapter 7 bankruptcy cases.
We have been doing this work for 10 years and have an
uninterrupted string of successful
cases and satisfied
clients.
Chapter 13
The way that attorneys' fees work in Chapter 13 cases is slightly more complex.
The Massachusetts Bankruptcy Local Rules includes a standard Chapter 13 fee of
$3,500 for pre-confirmation and $500 for post-confirmation services. (You can read the Court rule
here--this link will open a large PDF document on the Court website and the rule is on pages 83 and 84). This
is the amount charged by substantially all attorneys in Massachusetts for Chapter 13
cases.
However, what you actually pay
varies. A lawyer may agree to take part of the Chapter 13 fee upfront and put
the rest "in your plan." Any portion of the fee put into your
Chapter 13 plan usually just comes out of the share of money that your
creditors would otherwise get. It takes a moment to understand how this
works. Take this example: if you pay $1,750 to your
lawyer and the remaining $2,250 of the fee is put into your Chapter 13 plan, the
$2,250 of the fee in your plan will reduce the percentage
your unsecured creditors will receive on their debts. This does not affect you because
it doesn't matter if you pay 90, 50, 10, or 5 percent to unsecured creditors,
all unpaid balances are discharged
upon completion of your plan just the same. In essence, unsecured
creditors pay any amount of the fee put into your plan. This is a
traditional and well-established way of bifurcating legal fees in Chapter 13,
and firms that specialize in bankruptcy will often do this.
We usually charge clients as little as $1,500 and take the remainder of the
Chapter 13 fee from the plan. We can do this because we specialize in
bankruptcy and are always doing many Chapter 13 cases. We know how to make
your case succeed
so you get what you want and we get paid on
the back end (i.e. through your plan payments).
Payment Plans and Taking the Heat Off:
You can pay our fees over time. Ask us about our no-interest payment
plans.
Once you become a client and are on a payment plan with us,
we give you a special number to give out if your creditors call
you before
your case is filed. This allows you to reduce the heat and get a little
peace of mind while going through the pre-filing bankruptcy process. Payment plans
are optional, but some people benefit from them.
Next Steps:
You can give us a call at (617) 716-0282 or submit this form
if you want to get a free consultation and fee quote for your case.
Business Bankruptcy Fees:
As you might imagine, the fees for business bankruptcies are higher than for
consumer bankruptcy, but these fees are often paid out of business assets that
would otherwise go to creditors. Clients are usually billed in business
cases on an hourly basis, but we will also enter into flat fee
arrangements when appropriate.
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