Filing for bankruptcy, to many, can seem like an extremely scary event. It can often give off the impression of having completely run out of money, and declaring bankruptcy is the last-choice option to digging oneself out of debt. In some instances, however, filing for bankruptcy can actually be a good thing. In the long run, it may even save you time and money, depending upon your financial status and eligibility.
If you decide to pursue this form of debt relief, hiring an attorney specializing in financial law is a wise move. A bankruptcy lawyer will not only ensure that you file correctly and for the appropriate type of relief but may also help you save money over time.
Depending on the type of legal debt resolution you are seeking, a financial attorney will typically begin with a consultation to determine if this is the right path for you. Following this discussion, they will outline your available options—this specific process or alternatives. If proceeding with legal financial restructuring is the best fit, your attorney will guide you in selecting the right type and handle all necessary filings while representing your interests in court.
Legal fees for this process can vary based on the services provided, the type of financial restructuring you choose, and your location. Below, we will discuss the different types of financial debt relief and the average cost of an attorney specializing in this field.
Typically, Financial relief attorneys will usually charge their clients at a flat rate, meaning that you will pay your attorney a fixed price for their services, regardless of the time it takes for the attorney to work through your case. Some attorneys, however, charge clients on an hourly basis. Before deciding on an attorney, it’s important to look over your contract and confirm which pricing scheme your bankruptcy attorney plans to use.
In financial restructuring cases, attorneys must disclose their fees to the relevant court. Once disclosed, the courts must approve the amount being charged. In many instances, courts set a maximum fee that legal professionals cannot exceed, ensuring that clients are protected from excessive costs.
Average Chapter 7 Bankruptcy Attorney Fees
Chapter 7 financial restructuring involves liquidating nonexempt assets to settle outstanding debts. The amount an attorney charges for this service depends on factors such as the complexity of the case, their level of experience, and the size of the city where they practice.
For those paying a flat fee, rates typically range from $1,000 to $3,500. More experienced attorneys generally charge higher rates, while newer professionals may offer more affordable fees.
Average Chapter 13 Bankruptcy Attorney Fees
Chapter 13 Bankruptcy differs from Chapter 7 because it does not require the liquidation of nonexempt assets. Instead, individuals with a steady income can work with a legal professional to create a structured repayment plan lasting three to five years.
Another advantage of Chapter 13 filings is that courts across the country have guidelines for acceptable attorney fees. This means that, regardless of how much time an attorney spends on your case, the court sets a cap on what you can be charged. However, fees for Chapter 13 cases are generally higher. Depending on complexity, firm reputation, and location, attorney fees typically range from $2,500 to $6,000.
Additional Legal Services and Fees
Debt relief attorneys can provide various services beyond their standard case handling. Some of these may or may not be included in the overall fee agreement, so it’s important to be aware of additional costs.
Filing fees, conversion fees, and court appearances are common costs associated with financial relief cases. Additionally, many attorneys offer valuable services such as credit counseling, financial management courses, and general financial education.
Filing Fee and Process
Fortunately, filing fees for debt restructuring cases are standardized nationwide, so clients do not need to worry about being overcharged. The cost of filing a Chapter 7 case is $335, while filing for Chapter 13 costs $310. Those who choose to represent themselves may face higher costs, ranging between $350 and $450. However, success rates for self-represented cases are significantly lower.
When an attorney handles your filing, they ensure compliance with jurisdictional laws, submit the correct paperwork, and determine the appropriate type of debt relief plan. This step is crucial in legally reducing or eliminating financial burdens.
Hiring an attorney also provides the benefit of having all necessary financial records compiled and submitted to the courts, helping clients gain a clearer understanding of their financial situation. Moreover, attorneys help ensure deadlines are met, preventing case dismissal or delays that could prolong financial struggles.
In the filing stage, attorneys assist in determining which debts can be discharged and which must still be repaid. In Chapter 7 cases, they also help evaluate assets to identify what can be liquidated to settle outstanding obligations. While legal representation is not mandatory for financial relief filings, professional guidance can significantly ease the process.
Credit Counseling Fee
Before filing for debt restructuring, individuals must complete credit counseling within 180 days of submitting their case. Approved counseling providers, often recommended by attorneys, assess finances and establish a budget to help individuals avoid future financial distress. These sessions typically last about an hour and can be conducted over the phone, live, or in person, with costs averaging around $50.
Debtor Education Course
Before final debts can be cleared, individuals must complete a debtor education course. These courses teach financial management strategies, including budgeting, money management, and responsible credit use. Fees for these courses range from $50 to $100, depending on location, complexity, and type of case filed.
Before choosing financial relief services or hiring an attorney, conducting thorough research is essential. Many attorneys offer free initial consultations, where they outline the legal process, associated costs, and potential financial benefits of filing.
Depending on the type of financial relief sought, total costs can range from $1,500 to $6,000. While this may seem like a significant amount, compared to overwhelming debts, the cost of professional assistance is often a worthwhile investment in achieving long-term financial stability.
