What Does Bankruptcy Cost in California?

Filing bankruptcy in California has two separate costs: a court filing fee set by the federal judiciary, which is the same no matter which attorney you use, and an attorney fee, which varies. At Hedtke Law Firm the initial consultation is free, so you can find out what your case would actually cost before you commit to anything.

The court filing fee

This is set by the Judicial Conference of the United States and is identical in every bankruptcy court in the country. Chapter 7 and Chapter 13 have different fees. Because the schedule is revised periodically, always check the current figure on the official fee schedule at uscourts.gov rather than relying on a number you read on any law firm website.

If you cannot afford the Chapter 7 filing fee, you have two options the court provides: pay it in instalments, or apply for a fee waiver if your household income falls below the threshold set in the rules. Many people do not know the waiver exists.

Attorney fees: how they are structured

Chapter 7 is almost always a flat fee, and it is normally paid before the case is filed. There is a technical reason for that: fees still owed to your attorney at the moment of filing become part of the debt that gets discharged, so attorneys cannot ethically rely on collecting them afterwards.

Chapter 13 works differently. Part of the fee is typically paid up front and the remainder is built into your three-to-five-year repayment plan and approved by the court. That is why Chapter 13 often requires less money on day one, even though the total is higher.

The costs people forget to budget for

• Credit counseling course — required before filing, from an approved provider
• Debtor education course — a second required course, after filing
• Credit report pull — so nothing gets left off your schedules
• Amendments — if a creditor was missed and has to be added later

None of these is large on its own, but ask whether they are inside the quoted fee or on top of it. That single question is usually what explains why one quote looks cheaper than another.

What to ask before you hire anyone

• Is your fee flat, and exactly what does it cover?
• What is not covered — what would cost extra?
• Do I pay before filing, or through the plan?
• Will you personally appear at my 341 meeting of creditors?
• What happens to the fee if a creditor challenges my discharge?

Get the answers in writing. A firm that will not put its fee in writing before you sign is telling you something useful.

Be careful with the cheapest option

A non-attorney bankruptcy petition preparer can legally type your forms, and they are cheaper. What they cannot do is give you legal advice, tell you which chapter to file, advise you on which exemptions protect your house or your car, or represent you in court. If the wrong chapter is filed or an exemption is claimed incorrectly, the cost of fixing it — or of losing an asset — dwarfs the saving.

The most expensive mistake is waiting

Cost is the usual reason people delay, and delay is what turns a manageable case into an expensive one. Once wages are being garnished you are losing a slice of every paycheck. Once a trustee’s sale is scheduled, the options that save a house start closing. Filing the day before a sale can stop it; filing the day after generally cannot undo it.

Find out what your case would cost — free

The consultation costs nothing and carries no obligation. Bring your last six months of pay stubs, a rough list of who you owe, and any court papers you have received. In one meeting you will know which chapter you qualify for, what you would keep, and what the whole thing would cost.

Hedtke Law Firm — Fontana
7426 Cherry Ave, Suite 210-312, Fontana, CA 92336
Call (909) 457-0054 for a free consultation

Serving Fontana, Rialto, Colton, Bloomington and Jurupa Valley. Read more about Chapter 7 bankruptcy, Chapter 13 bankruptcy, or speak to a Fontana bankruptcy attorney about your situation.

This article is general information about California bankruptcy procedure and is not legal advice for your specific circumstances.