If you're considering filing for bankruptcy, you might be worried about the costs involved, particularly the attorney and filing fees. It's a valid concern, as the cost of a bankruptcy lawyer can be a significant expense. However, there are several factors that determine how much you'll end up paying. We've analyzed some data points and identified five main factors that determine bankruptcy attorney fees.
Understanding Bankruptcy Attorney Fees
Are you considering filing for bankruptcy and wondering how much it will cost you to hire an attorney? We've got you covered. Here are the factors that determine bankruptcy attorney fees in your area:
- Type of bankruptcy: The type of bankruptcy you file for will affect the attorney fees. Chapter 7 bankruptcy is usually less expensive than Chapter 13 bankruptcy due to the difference in complexity and duration of the case.
- Your location of residence: Attorney fees vary by location. Attorneys in urban areas tend to charge more than those in rural areas.
- The expertise of the bankruptcy attorney: Experienced attorneys with a proven track record of success tend to charge more than those who are just starting in the field.
- The complexity of the bankruptcy case: The more complex the case, the more time and resources the attorney will have to invest, which will reflect in their fees.
- The amount of connection involved in the bankruptcy case: If your case involves multiple creditors, assets, and debts, it will require more work from the attorney, which will result in higher fees.
If you want to estimate the cost of hiring a bankruptcy attorney in your area, use our bankruptcy attorney cost estimator. It's quick, easy, and will give you a rough idea of what to expect. Don't let the fear of high attorney fees prevent you from seeking the help you need to get your finances back on track.
1) Chapter 7 or Chapter 13 Attorney Fees
If you're considering filing for bankruptcy, it's important to understand that the type of bankruptcy you choose will affect the amount you pay in attorney fees.
A Chapter 7 bankruptcy is generally quicker and less complex than other types of bankruptcy. This means it requires less time and commitment from your attorney, making it less expensive. You can expect to receive a bankruptcy discharge within the first 90 days of filing for Chapter 7 bankruptcy, which is another reason why it's a popular choice.
Chapter 13 bankruptcy, on the other hand, is often referred to as a "wage earners" bankruptcy. This means you may still be required to pay off some of your debts. Chapter 13 bankruptcy is more complex and requires more time from your attorney, making it more expensive. However, attorney fees are usually included in the Chapter 13 bankruptcy payment plan.
It's worth noting that most bankruptcy courts have a list of presumptively reasonable fees that attorneys charge. This helps to ensure that you're not overcharged for legal services.
Get an Estimate of Fees Based on Your Zip Code
2. The complexity of the bankruptcy case
Chapter 7 and Chapter 13 cases may seem similar, but they actually have their own unique complexities. Let's take a closer look at each one:
Chapter 7 bankruptcy below median income
If you're considering filing for Chapter 7 bankruptcy, you might be wondering if you're eligible for a discharge. That's where a means test comes in handy. It's a tool that helps you determine whether or not you qualify. The government uses Census Bureau Administrative Expenses Multipliers and IRS data to complete the means test. To complete the means test, you'll need to fill out bankruptcy form 122.
So, how can you qualify? One way is to have an income that's below the median income of your state of residence. You can check the bankruptcy income limits by state to see if you meet the requirements. Alternatively, you can use the Chapter 7 calculator to calculate your eligibility based on the income limits in your state.
After filling out bankruptcy form B122A-1 and 122A-2, you may qualify for Chapter 7 bankruptcy. Attorneys generally find it easier to file for this type of bankruptcy if you earn below the median income of your state. This can affect the total sum of the bankruptcy.
Chapter 7 bankruptcy above median income
If you're struggling with debt, filing for Chapter 7 bankruptcy may be an option for you. To qualify for a discharge under Chapter 7, your disposable income must be below a certain amount, even if you earn more than the median income of your state.
If your income is above the median, you'll need to fill out Form 122A-2. Keep in mind that the process of determining eligibility for Chapter 7 bankruptcy is more complex if you earn more than the median income, which can result in higher attorney fees due to the additional time required to complete the process.
Chapter 13 Bankruptcy Attorney Fees
When you file for Chapter 13 bankruptcy, it typically takes between three to five years to receive a discharge. However, determining the plan payment can be a complex process. For instance, if you owe child support, you may be uncertain about how Chapter 13 handles those arrears. Additionally, there are logistical aspects that your attorney needs to consider during the case period.
If you're struggling with child support payments, Chapter 13 can help. It allows you to consolidate your debts and pay them off over time, including any child support arrears. Your attorney can guide you through the process and help determine the best plan payment for your unique situation. While the process may seem daunting, it's important to remember that Chapter 13 can provide a fresh financial start.
3) Your location may dictate the bankruptcy lawyer fees
Did you know that the location where you file for bankruptcy can greatly affect the cost of your discharge? According to Pacer, the cost can vary significantly depending on the area within your state. For instance, one area may charge over $2000 for a Chapter 7 bankruptcy, while another may charge less than $1500 for the same service. This discrepancy is not only present across the United States but also within your state. So, it's crucial to research and compare prices in different areas before filing for bankruptcy to save some money.
4) Level of attorney connection
Have you ever wondered why you see ads for low-cost bankruptcy options, but then receive a bill from your attorney that's higher than that amount? The answer lies in the fact that there are two types of firms that handle bankruptcy cases.
On one hand, there are bankruptcy mills that offer low-cost services, but they often operate with a one-size-fits-all approach, meaning you may not receive the personalized attention and legal advice you need for your unique situation. On the other hand, there are reputable bankruptcy law firms that offer comprehensive and tailored services, but they may come at a higher cost due to the experience and expertise of the attorneys handling your case.
While it may be tempting to go with the cheaper option, it's important to consider the potential long-term consequences of not receiving proper legal guidance. A reputable bankruptcy law firm can help you navigate complex legal processes, protect your assets, and ensure a successful outcome for your case.
Full-Service Bankruptcy Firm:
If you're considering filing for bankruptcy in Florida, you may want to consider hiring a full-service bankruptcy law firm. With this type of firm, you'll receive an initial consultation and work with a highly trained paralegal or attorney. You'll also have the opportunity to engage with the attorney multiple times and they'll be available to answer any questions you have throughout the process. The attorney will file for bankruptcy on your behalf and will be with you throughout the entire process, including showing up for your 341 meetings of creditors.
It's important to note that since each time you meet with an attorney is charged, a full-service firm can be more expensive than a bankruptcy mill. A bankruptcy mill is a firm that processes a large volume of bankruptcy cases with little attention to the individual needs of each client. While a bankruptcy mill may be less expensive, you may not receive the same level of personalized attention and support that a full-service firm can provide.
Have you heard of bankruptcy mills? According to the American Bankruptcy Institute, these are high volume law firms that aggressively advertise their services but provide poor legal assistance to their clients. While this may not apply to all bankruptcy mills, it is a common practice among them.
When you seek assistance from a bankruptcy mill, you are likely to be attended to by a non-attorney staff member such as a salesman. The attorney assigned to your case may have minimal contact with you, and may even be absent during 341 meetings. The objective of such firms is to offer a high volume of substandard legal services at a low cost. As a result, the attorney assigned to your case may spend minimal time on it, and the quality of legal assistance you receive may be inadequate.
5) Bankruptcy attorney expertise may indicate fee amount
Bankruptcy forms can be complex and technical, making it challenging for individuals to file them without a certain level of expertise. While the majority of the filling process is done on the form, having knowledge of the law can be helpful. For instance, a bankruptcy attorney with experience in filing all types of bankruptcy due to decades of practice and proper knowledge of the law will charge more than an attorney who is still learning on the job. Similarly, a board-certified attorney will also charge more because of the high demand for their services.
If you're considering filing for bankruptcy, it's essential to understand the costs involved.
Estimate the bankruptcy attorney fee in your area
Now that you have a better understanding of what factors contribute to bankruptcy fees, you may be curious about how much the fee will be in your specific location. Luckily, our free bankruptcy calculator can help you estimate this cost while providing other useful information. This tool uses your zip code to determine your area of residence and then calculates your Chapter 7 qualification using the means test. It also estimates your Chapter 13 plan payment, allowing you to compare both options. Additionally, the calculator compares other alternatives, such as debt management, debt payoff planning, and debt settlement. Try our bankruptcy calculator today and gain a clearer understanding of your financial options.