Bankruptcy Chapter 13 Cost

Chapter 13 Bankruptcy is regarded as the best personal bankruptcy option, as it provides a more extensive protection for you and your property. Through this option, the court will grant a deferment of foreclosure, property seizures, lawsuits or collection efforts from your creditors.

Not everyone is allowed to file for Chapter 13 bankruptcy. To qualify for Chapter 13 bankruptcy, the individual must have a steady source of income for regular payments and enough disposable income for the payments after covering the essential living expenses. Furthermore the debt amount must fall within the stipulated limits for secured and unsecured debts.

Once Chapter 13 Bankruptcy is filed, a repayment plan for your debts must be drafted, to be approved by the court. Once approved, a bankruptcy trustee will be appointed to collect your payments, manage disbursements to the creditors and monitor your adherence to the repayment plan. The repayment period allowed is from 3 to 5 years.

The total cost to file Chapter 13 bankruptcy is $274. It includes a statutory filing fee of $235 and an administrative fee of $39. These must be paid to the court clerk upon filing of the bankruptcy petition. There is also the trustee's fee, which could be considerable.

The lawyer cost of Chapter 13 bankruptcy varies. Though most lawyers will provide free initial consultations, the charges start with the commencement of the proceedings. Bankruptcy lawyers could charge a flat fee, retainer or hourly rates. Depending on the complexity of the case, the lawyer cost of Chapter 13 bankruptcy ranges from $2,500 to $4,000.

Bankruptcy lawyers require an upfront sum or retainer ranging from $500 to $1000 at the onset of the case. The remainder of the lawyer fees can be paid over time through the Chapter 13 plan. All fees in a Chapter 13 case must be approved by the court.