Is there a way to file Chapter 7 in a less expensive way

I think this question deserves an honest answer. I have known many people in my life who have half-seriously “joked” that they would file for bankruptcy “if only they could afford it.” It is a question that many people have, and it is worth discussing. The quickest answer is that, yes, you can always file a Chapter 7 petition pro se, without the aid of an attorney. That is a cheaper way to do it. However, is it the best way? For some, with limited to no property or assets, it may be. For most others, however, it may not be. Why, then, do attorneys charge what they charge for this service? Most attorneys in my area of southeastern Michigan are currently charging approximately $1000 to file a basic Chapter 7 bankruptcy petition. (This will vary widely from state-to-state and even within my state, so I'm using this figure for illustrative purposes only.) Depending on the geographic and the attorney, this might or might not include the Court’s filing fees. And, although I have seen a few attorneys and, especially, non-attorney “bankruptcy petition preparers” charging less than this in my area, this is generally also a starting-point price rather than a ceiling. It can rise with the level of complexity, in other words. Some attorneys charge much more than this as a starting-point. The filing fees for a Chapter 7 bankruptcy filing are currently $299. Debtors may file pro se, as described above, paying only these filing-fees and avoiding anywhere from $700-$1000 (or more) in attorney fees, but, unless the property of such debtors is very limited, they run the risk of misunderstanding the available exemptions and other complexities of the bankruptcy process and missing out on utilizing the process to its best effect. In any case, even without an attorney’s assistance, a Chapter 7 still costs roughly $300. Most people who have a certain amount of property that they wish to protect do wish to take advantage of the expertise of a bankruptcy attorney, however, and, at that point, the question remains: why does that expertise cost so much? The pat answer is the same that any service-provider in any industry, from automotive to medical and onward, would give: “I charge $X per hour, and the work will take X hours.” In the case of an attorney, that is certainly true. Attorneys in Michigan charge in hourly rates anywhere from around $150/hour upward, depending on experience and the legal areas they specialize in. The “flat fees” that attorneys often charge for something like a Chapter 7 bankruptcy filing do approximate an attorney’s hourly rate billed for the approximate number of hours it usually takes to meet with the client several times, collect their information and paperwork, and prepare the exceedingly lengthy bankruptcy petition and attached schedules and other documents. And that paperwork, since the 2005 BAPCPA (”Bankruptcy Abuse Prevention and Consumer Protection Act”), has grown much more complex and, therefore, more time-consuming and with more legal obligations for the attorney and, thus, more expensive for the debtor. But the real answer, I maintain, is not that attorneys simply deserve an hourly rate that boggles the minds of most working-people. Rather, the answer is that, whatever an attorney is charging for a Chapter 7, it is a small price to pay for the value you receive. For a mere $1000 + filing-fees, you can save a $200,000 home from foreclosure, stop night-and-day collection call harassment, and eliminate many thousands of dollars’ worth of credit-card debt, just to name a few of the primary results. Making all of this happen properly is hard work for the attorney filing the petition, but the real reason a Chapter 7–or any legal service–costs what it does is that that is what the end-result is worth.

Please note that I am a staff moderator for .com and that I am not licensed to practice in your state. This is not intended as legal advice. Please check with an attorney in your state. The two basic costs for a debtor using an attorney in a Chapter 7 case are the filing fee with the bankruptcy court and the attorney fee to the debtor's counsel. The cost of the filing fee is set, but may be paid in installments. In certain cases, a debtor may file an application for waiver of the filing fee. The standard for eligibility is as follows: The district court or the bankruptcy court may waive the chapter 7 filing fee for an individual debtor who: (a) has income less than 150 percent of the poverty guidelines last published by the United States Department of Health and Human Services (DHHS) applicable to a family of the size involved; (2) and (b) is unable to pay that fee in installments. It is up to individual attorneys and law firms to set the amount of the fees that they charge a debtor to represent the debtor in bankruptcy. By Federal law, the fee an attorney charges for representation of a debtor in bankruptcy must be reasonable and must be disclosed. Typically, a bankruptcy attorney will set a flat fee for the standard services required to get a bankruptcy case filed. This fee will vary from chapter to chapter -- it will typically cost more to prepare and file a Chapter 13 than a Chapter 7 case. The attorney will generally want the flat fee deposited up front before the filing of the bankruptcy petition. Attorneys will generally bill for any necessary services after the filing of the petition by the hour at their hourly rate. There are probably some attorneys out there who would accept a lower fee in certain situations. I would suggest that you get creative about your request for a reduced fee with an attorney. Do you have any particular skills and/or products that you could offer a bankruptcy attorney in trade for their fee? Try to think of any kind of value that you could offer the bankruptcy lawyer that would attract them to help you out. There is always the option of preparing and filing the bankruptcy case on your own behalf. However, without the specialized knowledge that bankruptcy attorneys have of the bankruptcy laws, which have become much more complex since the reforms of the BAPCPA, I would advise against it, depending upon the complexity of your particular situation. I hope this helps you and good luck.