When you think about the overall cost of a bankruptcy, you need to keep in mind that there are two components: the court filing fee and the attorney fee. The court filing fee is the same in every case. In Utah, the court filing fee is $375 for a chapter 7 and $350 for chapter 13.
Let’s first talk about the attorney fees for a chapter 7. In Utah, I have seen attorney fees for a 7 range from as low as $600 to as high as $2,200, with the most common fees right around the $1,000 - $1,400 zone. Remember, these fees are on top of the court filing fee, so when you call around and ask lawyers how much they charge for a chapter 7 bankruptcy, make sure you understand whether the quote you are getting includes the filing fee. I charge $1,265 for most of my chapter 7 cases if you pay for the whole case up front, so the total cost would be $1,600 and that includes my attorney fee as well as the court filing fee. I also offer a payment plan for chapter 13 if your household income is at least $1,500 per month. With the payment plan you just pay $375 up front and that will get your case filed so you are in the protection of bankruptcy, then you make 9 monthly payments of $200 per month after the case is filed for the attorney fees. The payment plan ends up costing $575 more than if you were to pay it all up front.
Now, let’s talk about the attorney fees in a chapter 13. In Utah, unless you have an unusually complex chapter 13 case, the attorney fees are not set by the individual attorney but are actually dictated by the courts. In other words, the overall fees your chapter 13 attorney is going to get are the same in every case and it’s somewhere between $3,250 and $4,000, depending on how much you earn and how much and what type of debt you have. What is different and what varies from lawyer to lawyer in a chapter 13 is how much of the attorney fees you must pay in advance, when you meet with the lawyer.
Let me give you an illustration. Let’s say you have a fairly simply chapter 13 case and the standard attorney fee for such a case is set by the courts at $3,250. If your attorney says he charges $800 up front to file your chapter 13 case, he is going to use $310 of that to pay your court filing fees and the other $490 of that will go toward his total fees of $3250, leaving another $2,760 that you still owe him. How does he get the remaining $2,760? The trustee pays the rest of his attorney fees out of the monthly bankruptcy payment you will make in your chapter 13. Some lawyers charge more up front and get paid less through your bankruptcy; others charge less up front and get paid more through your bankruptcy—either way, we all get the same amount.
I charge no attorney fees up front for a "0 Attorney Fee Down" chapter 13--you only have to pay .$350 and that covers all the hard costs associated with filing your case such as court filing fee and credit reports.
The fees I charge cover everything EXCEPT the following: 1) There is a second online course you have to take after your case is filed that costs $12.95 if you use the recommended course provider at www.accessbk.org. You pay for that course yourself. 2) Additionally, if you will be re-affirming on secured debts such as home or auto loans in a chapter 7 bankruptcy there is an additional fee of $50 for me to fill these out and get them filed in the court for you.