A Chapter 13 bankruptcy case can expensive to file but can ultimately save you lots of money in forgiven debt. Under the terms of a Chapter 13 case, you'll have to work out a payment plan with the bankruptcy court in which you'll pay back at least some of what you owe over a three- or five-year period. In the end, your remaining debts are discharged. Before you get to the payment plan in your case, you'll have to pay a variety of fees and charges.
Court Filing Fees
The basic filing fees for Chapter 13 are the same in every court across the country. All U.S. bankruptcy courts charge a $235 case filing fee and a $75 administrative fee, for a total cost of $310.
In terms of fees, attorney charges are the largest cost you'll face when you file Chapter 13 bankruptcy. A Chapter 13 case is much more complicated than an average Chapter 7 case, primarily because in a Chapter 13 bankruptcy you have to develop a repayment plan that will be approved by the court. As a result, attorney fees in a Chapter 13 case are often double those in a Chapter 7 case.
Attorney fees can vary dramatically based on where you file, with larger metro areas generally triggering higher attorney fees than more rural areas. Nationwide, the average fee is approximately $3,000, but you can expect to spend an additional $500 to $1,000 if your case is complicated or runs into additional snags, such as creditor complaints.
One of the benefits of filing Chapter 13 when it comes to attorney fees is that the courts outline what a "presumptively reasonable" fee is for that district. If an attorney attempts to charge a higher fee, the court will review that fee on your behalf. In San Francisco, the presumptively reasonable Chapter 13 fee is $3,500, while in central Alabama that rate drops to $2,700.
You are legally allowed to file your own Chapter 13 bankruptcy, a process known as a pro se filing. While you'll save the cost of an attorney, the odds are greatly increased that your case will be dismissed for failing to follow correct court procedure. For example, the Central California Bankruptcy District noted in a 2011 report that just .4 percent of pro-se Chapter 13 filings, or one in every 2,500, resulted in a discharge.
Most Chapter 13 cases are administered by "standing trustees" whose sole job is to handle bankruptcy cases. Trustee fees come out of the payments you make in your Chapter 13 plan and are capped at 10 percent of the amount of your plan payment.
Payments to Creditors
The amount you have to pay back to your creditors in a Chapter 13 case depends on a multitude of factors. While you may be able to escape paying back some or all of your unsecured debt, such as credit card debt, your priority debts must be paid in full. Priority debts include alimony, child support and certain tax payments. In most cases, if you're behind on installment debts, such as car payments or your home mortgage, you must pay enough to get current on those debts and may have to include your monthly payments in your Chapter 13 repayment plan. The amount you must pay to your unsecured creditors depends on your disposable income, as calculated in your bankruptcy petition.