It’s a little ironic to consider that filing for bankruptcy could cost you a fortune at a time when your financial fortunes are so bad you’re considering bankruptcy. As the saying goes, you can’t get something – even bankruptcy relief – for nothing, at least not unless your income is particularly low. Some bankruptcy costs are set at the federal level, but others can depend on the region where you’re filing.
The Cost of an Attorney
Lawyers in Florida and elsewhere base their fees on a few common denominators. Experienced attorneys with reputations for excellence typically charge more, and if your bankruptcy case is particularly complicated, you’ll probably pay extra. It costs more to file for Chapter 13 than Chapter 7.
Alper Law, with offices in Heathrow, Florida, indicates that Chapter 7 fees at this firm depend on whether you pass the first step of the Chapter 7 means test -- your income is less than Florida’s median income for a family of your size. If so, your case is most likely uncomplicated, so you'll pay less. In general, as of 2015, Chapter 7 fees for a Florida bankruptcy attorney run from a low of about $1,200 up to a high of about $2,500. Some firms will even work out payment arrangements for Chapter 7.
Expect to pay about twice as much for a Chapter 13 proceeding. Some Florida law firms indicate that you can pay a portion of the fee up front to file your petition, then include the balance in your Chapter 13 plan.
Inflation hikes costs for everything over time, including lawyers. If you want to file for bankruptcy in Florida, call around to local attorneys for current fees and payment terms. You can also try to negotiate better terms at your first meeting with the attorney, before you sign on the dotted line.
Qualifying for Legal Aid
If there’s simply no way you can come up with enough money to hire a lawyer, consider legal aid. The Legal Aid Society of Palm Beach indicates that you must earn one and a half times the federal poverty level or less to qualify for free representation. Some counties count the value of your assets in addition to your income. Even if you earn too much for free help, you might still qualify for reduced legal rates. The Florida Bar offers a list of legal aid resources in each Florida county on its website.
Not all legal aid offices handle bankruptcies. If the one in your area doesn’t, ask about pro bono programs in your area. They're staffed by local lawyers who donate their time and expertise to those in need.
Court and Administrative Fees
The federal government sets filing fees for bankruptcy petitions -- $245 for Chapter 7 and $235 for Chapter 13, as of the end of 2014. As with other costs, these fees can be expected to go up periodically to keep pace with inflation. Both chapters require an administrative fee of $75 and there’s a $15 trustee surcharge for Chapter 7. You must pay by cashiers check, money order or cash.
You can apply to the federal bankruptcy court for a waiver of Chapter 7 filing fees.
- Attorneys.com: How Much Does a Florida Bankruptcy Attorney Cost?
- United States Bankruptcy Court, Middle District of Florida: Filing and Miscellaneous Fees
- The Florida Bar: Legal Aid in Florida Pamphlet
- Legal Aid Society of Palm Beach County: How Do I Qualify?
- Bowin Law Group: How Much Does It Cost to File Bankruptcy?
- Alper Law: Attorneys’ Fees
- United States Courts: Application to Have the Chapter 7 Filing Fee Waived
Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.