Filing chapter 7 bankruptcy can be very expensive at a time when clients can least afford the expense. Accordingly, it’s important for prospective clients to understand the total cost of chapter 7 bankruptcy before hiring an attorney or filing a bankruptcy petition.
The cost of filing chapter 7 bankruptcy can be broken down into 3 major expenses: (1) attorney fees, (2) the court filing fee & (3) minor expenses such as credit counseling and potentially the cost of obtaining a credit report and/or tax transcripts.
Bankruptcy attorneys usually charge a flat fee covering the services necessary for most clients to obtain a discharge order which will eliminate certain debts. Flat fees in Santa Rosa can range from $900 to well over $2,000. Among the lowest cost bankruptcy attorneys in Santa Rosa is Michael Benavides who charges a flat fee of $900.
Bankruptcy attorney fees may or may not include additional costs such as the $335 court filing fee, credit counseling, or credit reports. Every client should understand what services the attorney fee covers before signing a representation agreement.
Court Filing Fee
The Bankruptcy Court in the Northern District of California charges $335 at the time a chapter 7 bankruptcy petition is filed. The court filing fee funds the bankruptcy court and compensates the Trustee for administering the bankruptcy estate. Some clients in extreme financial distress may consider filing an application to pay the filing fee in installments. In such a case, the client will pay a portion of the fee when the petition is filed and the remaining amount over 4 months. However, if a scheduled installment payment is late the court will dismiss the chapter 7 bankruptcy case. Therefore, it’s strongly advised that clients pay the entire $335 court filing fee at the time of filing the petition.
Before filing chapter 7 bankruptcy nearly every client must complete credit counseling from an approved provider. Credit counseling is fairly inexpensive with some providers charging only $15 for online counseling. Telephone counseling may cost more. Additional fees may include the cost of ordering a credit report and tax transcripts.