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I want to know what is a reasonable cost to file bankruptcy- chapter 7 or 13. How do I know that I will pass the means test?

Orlando, FL |

I have decent income but I am self employed and I have back taxes , students loans and credit card debt .

Attorney Answers 7


  1. The cost of a bankruptcy will vary depending on whether you hire legal counsel or represent yourself. If you do hire an attorney, fees will have a broad range depending on the attorney (experience and competence), and the complexity of the case. I would expect about $1,250 - $2,000 as a typical average range, plus costs (Filing Fees, Credit Report, etc.)

    The only way to know if you pass the Means Test is to run the figures. Do not do it yourself. I have seen too many people misunderstand the Means Test and either incorrectly qualify themselves or exclude themselves. Most experienced bankruptcy attorneys can run a quick (although not precise) Means Test at an initial consultation to see if you are even close one way or ther other. The Means Test takes a historical average of your income and allows for certain expenses. It is not based on reality, but on what the Internal Revenue Service has determined to be a necessary household budget, plus other some other allowances. Student loans are not taken into consideration even though they are usually non-dischargeable.

    This is a subject where you need assistance. If you want to run a preliminary Means Test, please feel free to call me, or another qualified bankruptcy attorney.

    The response given is general in nature and based upon limited information. It does not and cannot replace that of a proper consultation with a qualified attorney. You should not act upon this Information alone, but should seek legal counsel prior to taking any action.


  2. This question presumes that bankruptcy cases are like dry cleaning, one price. Most bankruptcy practitioners will offer a free or reduced-price consultation after which you will be quoted a price. Please do not assume that you will get the same level of service and experience regardless of price. In other words, you are submitting yourself to the jurisdiction of a federal court for the purpose of discharging a large debt burden. You do not shop for services of that importance on price.

    Posting questions anonymously and receiving general answers do not substitute for consulting with an attorney licensed to practice in the jurisdiction in which you live. Answers posted here by Kevin C Gleason are only intended for general education of the public on legal matters. Please consult a qualified professional before deciding what to do about your situation.


  3. The court costs to file bankruptcy are the same for everyone: Ch. 13 = $281.00; ch. 7 = $306. However, the attorney's fees charged vary greatly depending on the attorney's skill and experience and depending on your personal situation. I can tell you that your being self-employed and having tax problems indicate that your case will not be straight forward. Doable certainly, but not necessarily simple. To find out if you will pass the Means Test, you need an attorney to help you. Remember, you get what you pay for.

    The above information does not establish an attorney-client relationship and is based upon the limited information the questioner provided. Unless you have signed a representation letter and paid a retainer, you are not a client of the firm. You should seek legal advice from an attorney in your area if you want a full legal opinion in this matter.


  4. Qualifying for a Chapter 7 bankruptcy requires the potential bankruptcy debtor to pass an income test-- the Means Test-- formally denominated Form B22-A.

    The qualifying income limit is based on income, household size and the applicable State. If a potential bankruptcy debtor's income is below the ceiling, the applicant passes the income test.

    As other answers has intimated, the Means Test becomes tricky if income exceeds the ceiling income.

    See the hyperlink, in blue, below for Means Test criteria effective 11/1/2012.


  5. The costs of bankruptcy will include filing fees and attorney fees. Chapter 7 and Chapter 13 bankruptcy filing fees are $306 and $281, respectively (see link below). Attorney fees vary widely, but the more important note on attorney fees is to make sure you choose an attorney that fits you personally and meets your strategic goals. A good rule of thumb is to meet with three different attorneys and go with who you think is the best fit. You will know if you pass the means test, generally, by going to the web site below and clicking on the means test calculator. Once you complete it, it will give you a general answer but it should not be relied upon without review by an attorney.

    There are very specific requirements for discharging both back taxes and student loans. Back taxes and student loans, as a general rule, are not dischargeable. Credit card debt is generally straight-forward. However, I would recommend consulting with an attorney before moving (or not moving) forward with the bankruptcy.

    Disclaimer & Helpful Information: This answer is intended to provide legal information- not legal advice. Such materials are for informational purposes only and may not reflect the most current legal developments. Customized legal advice for your particular situation should be provided by a licensed attorney only after full disclosure of all relevant facts and after signing a retainer agreement with an attorney or law firm. SALMU LEGAL SERVICES PLLC: Alex Salmu, Attorney At Law | www.salmulegal.com | salmulegal@gmail.com | Phone: (248) 877-1016


  6. Most of our fees are pretty standard for both types of cases, the courts kind of tells us what we are allowed to charge. Based on what you've written, I'd suspect a CH 13 with roughly $500-$1000 down and the rest on the plan.


  7. For representation in a Chapter 7 case, most bankruptcy attorneys’ fees range from about $1,000 to over $4,000, plus the required court filing fee ($306). So what is the big difference and how do you choose who to go with?

    There are many factors that can affect fees. One is the complexity of the case. The main reason is that there are, in fact, differences between attorneys and what services they can offer.

    “YOU GET WHAT YOU PAY FOR!” …APPLIES TO BANKRUPTCY ATTORNEYS FEES TOO
    You should focus on the attorney’s quality and experience, rather than if he/she charges a bit more than the lowest priced competitors. You should find an attorney whose fees best match your needs and expectations in terms of quality and service.

    In order for individuals to file, they must pass the Means Test (or be exempt from it), which looks at income during the six month period prior to filing, and takes certain deductions. In order to see if you are eligible, your lawyer needs to review and analyze everything related to your case.

    Please note that the materials appearing on this Answer are provided for informational use only, and are in no way intended to constitute legal advice or the opinions of this law firm or any of its attorneys. The law is constantly changing, and the materials appearing on this Answer are not guaranteed to be correct, complete, or up-to-date. You should not act or rely upon any information appearing on this Answer without consulting a qualified attorney for individual advice regarding your own unique situation. Transmission of information through this Answer or this website does not create any attorney-client relationship between you and Royzman Law Firm, Inc. or Natella Royzman, Esq.

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