When an individual or couple files for bankruptcy, they have to pay a "filing fee" to the Bankruptcy Court for filing the case. This filing fee is normally included in the fees you pay to your attorney. The budget proposal that President Trump has submitted to Congress includes a provision to raise the bankruptcy filing fees. While the discussion has centered around raising the fees for Chapter 11 cases, normally when the fees are raised for one Chapter, the fees for all other Chapters are also raised. A Chapter 11 case is a reorganization bankruptcy. Normally these cases are filed by businesses who need to "reorganize" their business strategy, and often involves closing stores. However individuals can also file a Chapter 11 case. Non-business Chapter 11s tend to be individuals who have high income and/or high debts. Why can't these individuals file a Chapter 13 bankruptcy, which allows them to develop a re-payment plan? Because there is a limit to the amount of secured and unsecured debt that an individual can have and still file a Chapter 13 bankruptcy case. If the individual’s debts exceed the limit, they may have to file a Chapter 11 case. Chapter 11 cases are different from Chapter 7 and Chapter 13 cases in that the debtor incurs quarterly fees based on their monthly income. There are also monthly reports that have to be submitted to the US Trustee. Because of the ongoing requirements in a Chapter 11 case, a debtor needs to be represented by an attorney that is experienced in this type of bankruptcy.
It has been several years since the bankruptcy fees were raised, so it would not be unusual to see an increase in the cost to file any bankruptcy, not just Chapter 11. If filling Chapter 7 or Chapter 13 bankruptcy is something you have been considering, do not wait to see if the fees are raised. Attorneys cannot decrease these fees for you. The fees are set by the bankruptcy court and must be paid or the case will not be filed. Attorneys have to pay this fee before they can submit your case, which is why the fee is typically included in the total price that you pay. Our attorney's will be happy to speak with you about your situation in our free initial consultation. If you are not ready to have a meeting yet, take advantage of the books and reports we offer that will give you more information before you take the next step. Remember we want to do what is best for you and help you reach the fresh start you deserve, even if that does not mean filing bankruptcy. Our attorney will not advise you to file if that is not in your best interest.