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