Fees! Fees! Fees! Bankruptcy is getting more expensive!

One of the questions I often hear from people — typically, not my clients actually, but from people who ask about what I do — is “how do people pay an attorney, when they are bankrupt?” Admittedly, it is often a challenge. I am somewhat in control of what I charge — though I need to be paid for my time — and consumer filers can choose whether they feel the fees charged by an attorney are justified by the level of service, experience and qualifications of a particular attorney. However, some of the fees that face a debtor seeking relief from creditors under the Bankruptcy Code are not negotiable. I am talking, of course, about  the fees due to the bankruptcy court in order to file your case. Prior to the amendments to the Bankruptcy Code under the Bankruptcy Abuse Protection Consumer Protection Act of 2005 (“BAPCPA”) a Consumer debtor filing a Chapter 7 case could expect to pay $209.00 in filing fees to file her case. Similarly, a Chapter 13 debtor was required to pay $194.00 to file her case. Until November 2012, a Chapter 7 case cost $299.00 to initiate, and Chapter 13 case cost $274.00. The fees are on the rise again.  The Judicial Conference of the United States recently approved a rise in filing fees once again.  The new filing fees will go into effect on June 1, 2014 as follows:

Chapter                           Until May 31, 2014                 Starting June 1, 2014

Chapter 7                            $    306.00                                 $    335.00

Chapter 11                          $ 1,213.00                                 $  1,717.00

Chapter 12                          $    246.00                                 $    245.00

Chapter 13                          $    281.00                                 $    310.00

As you can see the traditionally consumer cases (Chapter 7 and Chapter 13 — as well as Chapter 12 for family farmers and fishermen) will see an increase in fees of $29.00.  If there is a strategic reason to wait to file your bankruptcy case until after June 1, 2014, it is unlikely that a $29.00 rise in fees will cause you to disembark from that course.  However, the cost for filing a Chapter 11 case are increasing by a whopping $504.00!  While reorganization under Chapter 11 is typically for corporate debtors, and a “mere” $504.00 rise in fees might not cause discomfort for a large multinational corporation, like American Airlines, seeking protection under Chapter 11, for consumers forced to look at Chapter 11, a 41.5% rise in the filing fee is not likely to go unnoticed.

The increased cost of filing makes it all the more important that you work with a qualified and experienced bankruptcy attorney, who understands the needs and goals of a consumer bankruptcy debtor.  Bankruptcy is full of traps and very harsh penalties for missing deadlines.  The bankruptcy courts are quick to dismiss cases when these deadlines are not met, leaving an unwary debtor to refile her case (after paying the filing fee again), and possibly face a loss of the automatic stay in the next go around.

If you are struggling to find a way out of your own personal debt crisis, schedule a free consultation with the Law Offices of James Wingfield today, by calling 508-797-0200, or visiting the contact page on our website.  You can also fill out the form below to email me directly.