Filing bankruptcy involves two separate expenses. There are legal fees and costs. The costs are usually fixed costs such as court filing fees, credit reports, credit counseling costs, and mailings, to name a few. Typical costs in a Chapter 7 bankruptcy case total approximately $485 and typical costs in Chapter 13 is usually $460 to $480.
Most bankruptcy attorneys charge a flat fee for the basic filing. In Chapter 7, the attorney fees vary by the complexity of the case but in general, they are between $800 and $2,500 from start to finish. A Chapter 13 attorney fees are $4,500 for taking the case through plan confirmation plus any additional services that may benefit you beyond the basic case. Examples of additional services are reducing the balance of what is owed on a car (cramming the car or interest rate), stripping off a second mortgage, cramming rental properties down to the market value on the day of filing, removing creditor judgment liens in either chapter is also an extra fee. The good news is that all of these additional fees are also flat fees and they are usually proposed during your consultation. You can choose to incur them or pass on the service.
You should always avoid ultra-low-rate bankruptcy mills that advertise heavily and usually only have a few lawyers and huge support staff. For a very simple ordinary case, they’re probably okay but you never know when complications will come up. Sometimes complications arise because it was the paralegal staff that prepared your case without lawyer supervision and didn’t catch something that should have been a red flag. These firms also have paralegals to meet with potential clients instead of an attorney. The first time you meet your lawyer should never be at 341 meetings of creditors and that should also never be the first time your lawyer looks at what was filed. If there’s a problem, it’s too late to fix it without more legal fees (negating whatever you think you saved), and having issues in Chapter 7 is never fun nor cheap.
On the flip side, don’t assume that you get more for hiring the most expensive lawyer either. Find an attorney that charges a fair price and will be involved in the preparation of your case. In Chapter 13’s the fees are capped by the court and they are very work-intensive so you will probably not get a discount on those fees. But on the positive side, you can get an experienced bankruptcy attorney that specializes in bankruptcy for the same price as an attorney who dabbles in bankruptcy. Be sure to get the bankruptcy attorney who does only bankruptcy! Also, be sure to ask what is covered in your Chapter 7 legal fees. Some attorneys include everything in the quoted fee and others will quote what appears to be a very low fee but will then charge you for other things after the case if filed and you have no choice but to pay.