Tag Archives: filing fees

Filing Fees – and They Say There is No Inflation

There are three things that you have to pay for when you file for bankruptcy. They are: the attorneys fee, the filing fee and the credit counseling fee. The attorneys fee is pretty self-explanatory. The filing fee is paid to the Court at the time that the case is filed. It will probably look like you are paying this to your attorney; because you will pay it by handing your lawyer the money; but your lawyer will then pay the Court when he files your case. The credit counseling fee is ultimately paid to the pre-petition credit counseling company that you use to do your mandatory pre-petition credit counseling course. This you may pay directly, and you may pay it to your lawyer so that your lawyer can pass it on. Regardless, ultimately, you are the one paying for these things.

What brought this subject to mind this week is that the Administrator of the Courts just announced an increase in filing fees. A bankruptcy filing fee is generally divided between the Court for services provided by the Court and its clerk and the Trustee for services provided in administering your case. This increase is all going to the Courts.

The two most common filing fees for consumer debtors both went up $29 apiece, which is a substantial jump. What makes this a bit of a shocker is that fees just went up in November, 2011. Here is how fees have changed over just the last few years.

………………..  3/2006                Pre 11/2011                          2011 – 5/31/2014                      6/1/2014
Ch. 7                   $209                         $299                                         $306                                          $335
Ch. 13                 $194                          $274                                        $281                                           $310

There are all kinds of reasons and explanations for the increases, but the bottom line remains that it is becoming more and more expensive to file for Bankruptcy. I’ve practiced in many areas of law during the last 24 years, and I remain very proud of the Bankruptcy bar’s dedication to keeping attorneys fees as low as possible. When you file a Bankruptcy, you are filing a highly specialized, Federal Court case; and in most cases it will be substantially cheaper than any other significant legal event you have ever been a party to.

Bankruptcy attorneys were the first to really embrace automation. We have gotten very good at efficiently explaining complex legal concepts to our clients. That is not to say that Bankruptcy attorney fees haven’t gone up. The 2005 Bankruptcy Reform Act pretty well doubled the amount of work required to file a Bankruptcy and sent the lawyer’s liability soaring. Needless, to say – fees went up. Although I will say that they haven’t gone up in this office since then.



The Government is Shut Down, Can I Still File for Bankruptcy?

Yes, for now.  Probably.

Believe it or not, the question of how the government shutdown would impact the practice of Bankruptcy consumed most of my morning last Tuesday; and I was not alone.

The simple answer is that the Federal Courts, of which the Bankruptcy Courts are a part,  announced on Monday that they had enough money to continue operating normally for two weeks.  Most of that money comes from filing fees, and I suspect a large percentage of it comes from Bankruptcy filing fees – but I regress.  So, the simple answer is – no problem for two weeks, then the Courts reassess.

Not so fast.  The bankruptcy system is overseen by the U.S. Trustee’s office, which is a division of the Department of Justice; and almost all of them are furloughed.  Many bankruptcy cases have the IRS, the SBA or some other Federal agency as an active party.  They are all furloughed, and if they aren’t, odds are that their bankruptcy lawyers are from the Department of Justice; and they are furloughed.  So, now what.

One thing that my court did quickly, and that appears to be unique to my jurisdiction is that my Judges entered a General Order staying all matters in Chapter 7’s and 13’s to which the IRS is a party.  Well, we are taking that to mean in which the IRS is an active party.  Technically, the IRS is a party in almost all Chapter 7’s and 13’s.  So, the two objections to claim that I filed last week in the same case now have different response dates, and one hearing date has been indefinitely postponed.

Also, the case trustees are not Federal employees, they are private attorneys; but they are appointed by the U.S. Trustee’s office.  They remain on the job, but I am unsure how long they will continue to be appointed to new filings.  First Meetings of Creditors continue to be held as scheduled, except, of course, neither the IRS nor the U.S. Trustee’s office will be there asking questions I would generally rather my clients weren’t being asked.  In fact, this may be a uniquely good time to file a case with means test issues.  Actually, a month ago probably would have been better. . . . I am teasing – sort of.  It would be interesting to see how that would play out.  If the US Trustee can’t object to a bankruptcy filing because the staff is furloughed, does that toll the time in which the objection must be made?  I wouldn’t think so, and it will be really interesting to see how the Courts deal with that issue, and they almost certainly will.

In the meantime, cases are filing like normal.  The automatic stay (i.e., bankruptcy protection) is going into effect just like always.  Most cases are proceeding normally at this point.  How thing will change if this continues for long, I don’t know.  I am reasonably sure of one thing, though.  The Bankruptcy courts are not going to stop accepting new filings anytime soon.  Bankruptcy cases all include a filing fee – $281 for a Chapter 13 and $306 for a Chapter 7 filing; and the Federal Courts are far too broke to turn that down.