How Much Do Bankruptcy Attorneys Typically Charge?

Filing for bankruptcy is a significant financial and legal decision. Although individuals are permitted to file bankruptcy without an attorney—commonly called filing pro se—handling a bankruptcy case without experienced legal representation can create unnecessary risks.

Bankruptcy requires debtors to disclose detailed information concerning their income, expenses, debts, assets, property transfers, financial transactions, lawsuits, and other financial affairs. The appropriate bankruptcy chapter must also be selected, exemptions must be properly claimed, and numerous deadlines and procedural requirements must be followed.

Hiring a bankruptcy attorney adds to the cost of filing, but experienced counsel can help debtors understand their options, identify potential problems before the case is filed, and navigate the bankruptcy process.

So, how much does a bankruptcy attorney typically cost?

The answer depends on the type and complexity of the case.

4 Reasons Why You Might Need a Bankruptcy Lawyer

Before deciding to handle a bankruptcy case yourself, consider some of the ways experienced bankruptcy counsel can help.

1. Bankruptcy Requires Complete and Accurate Financial Disclosure

Bankruptcy petitions, schedules, and statements are signed under penalty of perjury. Debtors must provide complete and accurate information concerning their financial circumstances.

An innocent error does not automatically constitute bankruptcy fraud. Nevertheless, significant errors or omissions can create serious problems in a bankruptcy case and may require amended filings, additional documentation, hearings, or other corrective action.

Intentional concealment of assets, false statements, fraudulent transfers, destruction or falsification of records, and similar misconduct can have much more serious consequences. Depending upon the circumstances, intentional misconduct can result in denial or revocation of a discharge and potentially civil or criminal consequences.

A bankruptcy attorney can help a debtor understand what must be disclosed and properly prepare the required schedules and statements. Take a look at all the forms that must be accurately completed and properly filed.

2. Chapter 7 Requires Careful Analysis Before the Case Is Filed

Chapter 7 is commonly described as a liquidation bankruptcy. However, that does not mean every Chapter 7 debtor loses property.

The Bankruptcy Code permits debtors to claim applicable exemptions that may protect certain assets from administration by a Chapter 7 trustee. Which exemptions are available depends on federal bankruptcy law, applicable state law, residency requirements, and the debtor’s individual circumstances.

Before filing Chapter 7 an attorney can evaluate issues such as:

• Whether the debtor qualifies for Chapter 7;
• The applicable means test;
• Available exemptions;
• Equity in homes and vehicles;
• Bank accounts and other financial assets;
• Tax refunds;
• Business interests;
• Property owned jointly with another person;
• Recent transfers of property;
• Payments made to relatives or other creditors before bankruptcy; and
• Whether any assets could potentially be administered by the Chapter 7 trustee.

This analysis is important because many bankruptcy problems are easier to address before the petition is filed than after the bankruptcy case has begun.

3. Chapter 13 Is More Complicated Than Simply Filing Paperwork

Chapter 13 allows qualifying individuals with regular income to reorganize their financial affairs through a court-supervised repayment plan that generally lasts three to five years.

A Chapter 13 debtor must propose a legally confirmable plan addressing creditors and satisfying numerous requirements of the Bankruptcy Code.

Depending upon the case, a Chapter 13 attorney may need to address mortgage arrears, vehicle loans, tax obligations, secured claims, priority debts, disposable-income requirements, exemptions, objections to claims, motions for relief from stay, trustee objections, and plan modifications.

Attorney involvement also continues after the initial petition is filed. Obtaining confirmation of the plan and successfully completing a Chapter 13 case can require substantial work throughout the life of the case.

For these reasons, Chapter 13 attorney fees are generally higher than fees for a routine Chapter 7 case.

4. A Bankruptcy Attorney Can Help Prevent Costly Mistakes

The value of bankruptcy representation is not simply having someone complete forms.

An experienced bankruptcy attorney should evaluate the debtor’s financial situation before filing and identify potential issues involving property, exemptions, income, transfers, secured debts, nondischargeable obligations, and other matters that could affect the outcome of the case.

For example, a debtor may discover too late that an asset is not fully exempt, that a recent transfer can be challenged by the trustee, or that a particular debt will survive bankruptcy.

Proper planning and legal advice before filing can help identify these issues and allow the debtor to make an informed decision about whether bankruptcy—and which chapter—is appropriate.

How Much Does It Cost to File Bankruptcy?

There are two separate categories of costs to consider: court costs and attorney fees.

Bankruptcy Court Filing Fees

Bankruptcy filing fees are established by the federal court system rather than by individual attorneys.

Currently, the petition filing fees for the two principal consumer bankruptcy chapters are:

• Chapter 7: $338
• Chapter 13: $313

Additional court fees can apply if certain motions, amendments, appeals, or other proceedings become necessary during the case.

Individual debtors who cannot pay the entire petition fee at once may, under appropriate circumstances and with court approval, request permission to pay the filing fee in installments. Certain qualifying Chapter 7 debtors may also be eligible to request a waiver of the filing fee.

Court filing fees are separate from attorney fees.

How Much Do Bankruptcy Attorneys Charge?

There is no single nationwide fee for bankruptcy representation.

Attorney fees depend on several factors, including:

• The bankruptcy chapter;
• Geographic location;
• Complexity of the debtor’s financial circumstances;
• Number and type of assets;
• Whether the debtor owns a business;
• Secured debts and mortgage issues;
• Anticipated disputes with creditors or the trustee;
• Additional motions or litigation that may be required; and
• Local bankruptcy court practices.

Chapter 7 Attorney Fees

Chapter 7 attorneys frequently charge a flat fee for a routine consumer case.

A straightforward case involving primarily unsecured debt and fully exempt assets may cost considerably less than a Chapter 7 involving substantial assets, business ownership, complicated property issues, significant pre-bankruptcy transfers, or potential disputes with the trustee.

When comparing fees, prospective clients should ask exactly what the quoted fee includes and whether additional legal work will result in additional charges.

Chapter 13 Attorney Fees

Chapter 13 attorney fees work differently.

Because Chapter 13 cases generally last three to five years and require substantially more ongoing attorney involvement, legal fees are typically higher than in Chapter 7.

Many bankruptcy courts have local procedures allowing attorneys to receive a standardized or presumptively reasonable fee for routine Chapter 13 representation without filing a detailed fee application. More complicated cases may justify additional compensation, subject to the Bankruptcy Code and court approval.

Depending upon local practice and the circumstances of the case, a Chapter 13 attorney may require a portion of the legal fee before filing, with some or all of the remaining approved attorney fee paid through the Chapter 13 plan.

That can make Chapter 13 representation more financially manageable for debtors who cannot pay the entire attorney fee before filing.

Are Payment Plans Available for Bankruptcy Attorney Fees?

Many bankruptcy attorneys offer payment arrangements, but the structure depends significantly on the bankruptcy chapter and the law firm’s policies.

In a Chapter 7 case, the timing of attorney-fee payments can involve important bankruptcy considerations. Clients should discuss the firm’s payment requirements before filing.

Chapter 13 provides greater flexibility because court-approved attorney fees may often be paid, at least in part, through the debtor’s repayment plan.

Prospective clients should ask:

• What is the total anticipated attorney fee?
• How much must be paid before filing?
• What services are included?
• What circumstances could result in additional fees?
• Are court filing fees included or separate?
• In Chapter 13, how much of the attorney fee will be paid through the plan?

Understanding the fee arrangement at the beginning of the representation can help avoid surprises later.

Is Hiring a Bankruptcy Attorney Worth the Cost?

The answer depends on the individual case, but bankruptcy involves considerably more than completing forms.

An attorney can evaluate whether bankruptcy is appropriate, determine which chapter may provide the best relief, analyze exemptions and assets, identify potential problems before filing, prepare the required documents, represent the debtor at the meeting of creditors, respond to trustee inquiries, and address legal issues that arise during the case.

The consequences of making the wrong decision can sometimes exceed the cost of obtaining competent legal representation in the first place.

Individuals considering filing without an attorney can also review information provided by the United States Courts concerning bankruptcy and pro se filings.

If you are considering bankruptcy in Florida, speaking with an experienced bankruptcy attorney can help you understand the likely costs, available options, and potential consequences before deciding whether to file.

Florida residents who reside in the Middle and Northern Districts of Florida considering bankruptcy can contact attorney Juan C. Burgos to discuss their circumstances and available bankruptcy options.