Chapter 13 Bankruptcy Cost
Our Chapter 13 bankruptcy cost is hourly. We will estimate costs for your particular case at your initial consult.
The Court sets a Benchmark fee of $4,500-$5,000 for a non-business case and $5,000-$5,500 for a business case. There is an additional filing fee of $313.00, which the Court charges. The Benchmark Fee covers attorney fees for filing the case, getting it approved by the Court, and reconciling all claims.
Once the Trustee files his Notice of Reconciliation of Claims, the period covered by the fee ends. If your Chapter 13 plan is changed after the end of the Benchmark period, or if other legal services are required, there may be additional charges which are generally charged on an hourly basis.
All Chapter 13 attorney fees are subject to court approval. Often, people who need to file bankruptcy are cash-strapped. Many bankruptcy attorneys, including Cross Stone Law, require a small down-payment before filing. The balance of the attorney’s fee is paid through the Chapter 13 Plan. In certain cases, such as where you are being garnished and cannot come up with the money to file, the Court may allow you to pay the court filing fee in installments over a 120 day period.
We try to be fair in our fees. Each case is treated individually.
How Much Will My Chapter 13 Payment Plan Be?
How much your Chapter 13 plan payment will be is determined by the Court. The monthly payment is calculated by many factors. There can be both a floor and a ceiling to the payment amount.
The floor (or minimum) is determined by simply adding together all the things that the individual wants in the Plan (mortgage arrearage, property taxes, auto loans, administrative costs, etc.) and figuring out how much it takes per month to pay everything off.
The ceiling (or maximum) is determined in the same way. You figure how much the monthly payment would be if all of the debt were paid back at a low-interest rate.
How long do I have to make a Chapter 13 payment to a trustee?
Chapter 13 plans run from three to five years long. If your income is over a certain amount for your household size (called median income), you must pay for 5 years. The only exception to this is if you can pay off all of the debt with interest in less than 5 years.
Examples of claims that don’t have to be paid
- You never pay back more than the total amount you legitimately owe under the law.
- You do not have to pay claims that are barred by the statute of limitations or claims that are barred from collection under the law.
- Usually, you do not have to pay all of the unsecured debt (credit cards, medical bills) if you do not have enough income.
- If you don’t have enough income, you may not have to pay back a property settlement from a divorce.
Claims that must be paid
But if you are trying to keep secured assets from being repossessed or foreclosed, you will have a certain minimum amount that you must pay no matter your income to keep the secured property. Most tax arrears and past-due child support will be required to be paid. There are trustee fees and attorney fees that have to be paid. If you are keeping your home, your regular mortgage payment will be made directly to your lender in most cases. This must be paid each month at the same rate as before the bankruptcy was filed.
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Ready to find out whether bankruptcy can help you?
Complete our free, online debt evaluation form or call/text our office at (903) 759-5922. You can also email Carol@CrossStone.com. Find out if bankruptcy is your best option and whether it will help you.