One of the first questions about Chapter 7 bankruptcy Chicago consumers ask is “how much will filing for Chapter 7 cost?” This, of course, is a natural question considering that, normally, a person considering filing for bankruptcy in Chicago has already run up against the limits of his or her financial resources.
While the 2005 amendments to the bankruptcy code have made filing for Chapter 7 somewhat more complicated, and therefore more expensive, it is still an affordable option for people facing significant financial obstacles. For example, the filing fee to file a Chapter 7 bankruptcy petition in the U.S. Bankruptcy Court is $299. While $299 is certainly not a small amount of money, it is less expensive than the $350 filing fee required to file a civil law suit in a United States District Court.
The bankruptcy laws also require people seeking bankruptcy relief to take two courses – one before filing for bankruptcy, and one after. The pre-filing credit counseling generally costs $30 to $50. The post-petition financial education course also typically costs between $30 and $50. There is one company that I know of that charges $35 for the pre-filing course and $15 for the post-filing course. At $50 for both courses, this is the best value I’ve found.
There are several other possible expenses. These include a merged three-bureau credit report, home or vehicle valuation, tax transcripts, and an asset search. These expenses usually come to around $100 if they are all required in your case.
The largest expense involved in filing for Chapter 7 bankruptcy is attorney’s fees. Consumer bankruptcy attorneys charge a wide range of fees for a Chapter 7 bankruptcy. The average fee for a basic, single-filer Chapter 7 is around $1,500 – although I’ve seen bankruptcy attorneys in Chicago advertising fees as low as $650 on Craigslist. One thing to keep in mind, however, is that in most instances you get what you pay for. Rock-bottom fees typically equate to bare-bones service. Many discount bankruptcy firms hire contract lawyers to attend the meeting of creditors with the client and paralegals do most of the work on the petition.
Consumers should look at cost as well as level of services and comfort with the attorney. The savings of $300 or $400 won’t mean much if your case is not handled correctly or you find it dificult to work with your attorney.
All in all, most people should be able to file for Chapter 7 for less than $2,000 total. While there are factors that could make the costs higher or lower, most consumer bankruptcy attorneys will give you a quote for a flat fee before you make any kind of commitment.
Filed under: Chapter 7
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