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How Much Does A Bankruptcy Lawyer Cost
Several types of costs are involved with a debtor filing bankruptcy. Those costs break down into three main categories:
- Filing fees paid to the Bankruptcy Court;
- Attorneys' fees paid to the bankruptcy lawyer who files and administers debtor's case; and
- Payments made within the debtor's bankruptcy plan, if any, to creditors for repayment of debts.
The first category of costs, filing fees, vary by chapter of bankruptcy filed, whether it be a Chapter 7 individual or corporate liquidation case, a Chapter 13 individual reorganization case or a Chapter 11 corporate reorganization case. The filing fee charged by the Bankruptcy Court is not something that can usually be waived through fee waivers. Generally speaking, filing fees for a Chapter 7 case are approximately $299, and those for a Chapter 13 case are lower, at $274. Chapter 11 filing fees can be higher ($1,039) for large corporate cases because of the time, effort, storage space, volume of paper, and court personnel required to process and administer the case (usually over a longer period of time spanning months, if not years).
The filing fee can be spread out in payments made even after the actual filing. Payment plans are typical in bankruptcy cases when debtors are facing financial distress and that distress is the very catalyst for bankruptcy filing.
The second category of costs relating to attorneys' fees is a larger component than the first. Many bankruptcy attorneys offer free initial consultations to prospective debtors. With the , the process has become more complicated and expensive to file. Lawyers have a heightened standard of liability under the amended bankruptcy laws. With increased liability comes more expensive legal malpractice insurance for attorneys. These costs of doing business are pushed along, at least in part, to the ultimate client through attorneys' fees.
In a typical Chapter 7 case, attorneys' fees may range from $600 on the lower end to more than $1,500 on the higher end. The locality of where the case is filed, where the attorney practices, complicity of the case, time line for filing the case and years of experience of the lawyer all factor into the setting of the attorney's bill rate and fees. In Chapter 11 and 13 cases, attorneys' fees hover in the same approximate range as Chapter 7 cases, so long as the case is not a mega-corporate bankruptcy. The types of properties that are being liquidated within the bankruptcy case effects the attorneys fees calculation.
Bankruptcy Plan Payments
The third category of costs for payments required to be made during the bankruptcy varies by the circumstances of the case. These costs are typically paid to the bankruptcy trustee who is charged with supervision of the case, for the trustee to distribute in appropriate proportions to creditors.