Considerations

• There are hidden costs of bankruptcy that, for many people, outweigh the actual legal bill you have to pay to file bankruptcy. These can include possible ramifications for your credit score or possible concerns an employer might have if you file bankruptcy. However, many people find that filing for bankruptcy in order to obtain a fresh start is the best option for them. The remainder of this article will assume the reader has determined that this is the case for them.
  
  

Fees

• Most people who are considering bankruptcy are considering it because they have accumulated bills that they cannot pay as they come due. Some lawyers advise clients to stop paying nonessential bills and apply the saved money toward legal fees. Most lawyers require a retainer. Attorney's fees must be approved by the court. Fees have gone up since the Bankruptcy Reform Act of 2005. In addition, debtors must now also go through mandatory credit counseling prior to filing for bankruptcy.
  
  

Chapter 13 Bankruptcy

• A Chapter 13 bankruptcy is more complex and time consuming than a Chapter 7 bankruptcy and can be more costly in total legal fees. In Chapter 13, the debtor has a plan approved by the bankruptcy court. The debtor then makes a single payment to a trustee, and the trustee distributes the funds to the creditors in accordance with the plan. Usually the legal fees are paid in part when the case is initially filed and in part through subsequent payments made by the trustee.
  
  

Chapter 7 Bankruptcy

• Chapter 7 cases are simpler and less expensive than Chapter 13 cases. One Orlando firm recommends as a guideline that an individual should never pay in excess of $1700 in legal fees plus $299 in filing fees. This figure may differ in different parts of the country and, of course, each case has unique characteristics, but in general Chapter 7 is less expensive.
  
  

Ways to lower bankruptcy fees

• One of the best ways to lower your bankruptcy attorney fees is to arm yourself with as much information as possible before meeting with your attorney. This can be accomplished through online research and through reading books on bankruptcy. It is also a good idea to prepare your personal financial information such as tax documents, bills and proof of income before meeting with your attorney. Doing your homework ahead of time will simplify the matter for your attorney and reduce the amount of hours your attorney ultimately bills you for working on your case. Clients who have a low enough income can seek volunteer assistance through organizations such as legal aid.