Make no mistake, people are filing for bankruptcy when they have reached their financial limits, but the unfortunate truth about filing for bankruptcy is that it will cost money to do so. People will need to be aware of the many costs that are inherent to bankruptcy cases in Arizona, including the overall bankruptcy cost.
Bankruptcy fees may vary by the specific location in Arizona in which you file, as attorney fees are likely to be higher in Phoenix than they might be in, say, Tucson. While this might lead some people to seek attorneys in smaller cities, the truth is that there can be a greater concentration of bankruptcy lawyers in a major city which also means prices could be lower because of increased competition.
Bankruptcy Attorney Fees in Arizona
Most people who are filing for either Chapter 7 or Chapter 13 bankruptcy are going to need bankruptcy attorneys to assist them in filing their case. There is no getting around the fact that a Chapter 7 case is going to cost much less than a Chapter 13 case because a lawyer has much more work to do in Chapter 13 cases. It is crucial to meet with an experienced Arizona bankruptcy attorney to navigate the complex bankruptcy filing process and ensure eligibility for different types of bankruptcy relief.
On average, a Chapter 7 bankruptcy attorney in Arizona should cost a person somewhere between $1,000 and $1,500, although a person’s amount of debt can impact prices. With the Chapter 13 case, we could be looking more at a $4,000-$5,000 range.
People should not think that they cannot file if they cannot afford to pay attorney’s fees all at once. Many lawyers will allow people to enter monthly or weekly payment plans.
Bankruptcy Filing Costs in Arizona
The District of Arizona United States Bankruptcy Court states that the Arizona Bankruptcy Court filing fees are generally $338 for Chapter 7 cases and $313 for Chapter 13 cases. There is also a $78 administrative fee and $15 trustee surcharge for Chapter 7 cases, but Chapter 13 filers only pay the administrative fee.
Some of the other bankruptcy filing fees include:
- Abandonment (Rule 6007(b)) — $188 for all cases
- Adversary Complaint including a Notice of Removal — $350 in a Chapter 7 case when filed by a trustee or attorney for the trustee and due at the time of filing, unless the trustee files a notice that there are insufficient funds. $350 in a Chapter 13 case when filed by a debtor in possession, an attorney for a debtor in possession, a trustee or attorney for the trustee, and due again at time of filing, unless a motion and order to defer payment is filed with the complaint. No filing fee when filed by a Chapter 7 or 13 debtor or debtor’s attorney.
- Amendment — $32 for all cases
- Appeal/Cross-Appeal — $298 for all cases
- Appeal/Cross-Appeal, Direct to 9th Circuit — $207 for all cases
- Archive Retrieval — $64 for all cases, first box only and $39 for each additional box
- CD of Hearing — $32 per compact disc
- Certification of Document — $11 for a single document plus copy fees.
- Claim Transfers — $26 for all cases for each claim transferred
- Computer Access to Court Database — $0.10 access fee per page from Internet
- Converting Chapter 13 to Chapter 7 — $25
- Copies — $0.50 per page copied and $0.10 for paper copies of documents or dockets printed from the court’s counter computers
- Deconsolidation / Splitting of Jointly Filed Case — $338 for Chapter 7 and $313 for Chapter 13
- Electronic Record Retrieval Fee — $19.90 judiciary administrative fee and flat rate record pull charge
- Electronic Record Retrieval Per Page Fee — $0.65 Federal Records Center (FRC) per page fee
- Exemplification — $23 for exemplification of any document plus copy fees
- Filing/Indexing — $49 for filing or indexing any paper in a case for which an initial filing fee was not paid
- Involuntary Petition — $338 for Chapter 7
- Motion for Sale of Property Free and Clear of Liens — $188
- Motion to Lift, Vacate, or Modify Stay — $188
- Motion to Withdraw Reference — $188
- Motion to Redact — $26
- Registration of Foreign Judgment — $49
- Reopening — $260 in Chapter 7 cases and $235 in Chapter 13 cases
- Reproduce Copy of Electronic Record Stored Outside of CM/ECF — $31 judiciary administrative fee for electronic record stored outside of CM/ECF
- Returned Check — $53 per NSF check returned
- Search Fee — $32 for each name or document searched.
Mandatory Classes Costs
The United States Department of Justice offers lists of approved Arizona credit counseling courses and Arizona debtor education courses. All individual bankruptcy filers must complete pre-bankruptcy credit counseling and pre-discharge debtor education.
The two courses cannot be provided at the same time. Credit counseling occurs before a person files for bankruptcy while debtor education happens after they file. A certificate of completion for both credit counseling and debtor education will be required before a person’s debts can be discharged.
Credit counseling agencies may charge reasonable fees for their services, but people who cannot afford fees should know that counseling agencies must provide services free or at reduced rates by offering a sliding fee scale, as well as a fee waiver for people below a certain income level (150 percent of the poverty level for a family of equal size).
Other Miscellaneous Costs
People can also amass many other costs relating to their bankruptcy case. For example, there will be the cost of gas or transportation to and from the courthouse.
People may also have to pay for credit reports to give to their attorneys. Some lawyers may be able to assist people in obtaining credit reports.
Filing Fee Waivers
A person hoping to file for Chapter 7 bankruptcy can apply for a court filing fee waiver. They will need to complete Official Form 103B: Application to Have the Chapter 7 Filing Fee Waived.
A person must prove to a court that they cannot afford to pay their fees and their income is less than 150 percent of the federal poverty guidelines, which are published by the United States Department of Health and Human Services. If people do not qualify for a fee waiver, they may still be able to complete Official Form 103A: Application for Individuals to Pay the Filing Fee in Installments so they can agree to pay their fees in four installments.
Deeper Dive into Bankruptcy Costs in Arizona
Filing bankruptcy in Arizona involves initial costs that are apparent, but several nuances and potential hidden expenses warrant further exploration. Understanding these details can empower individuals to make informed decisions and better prepare for the financial implications of bankruptcy.
Attorney Fees: A Closer Look
The choice of a bankruptcy attorney is pivotal, as their expertise and experience significantly impact the success of your case. Attorney fees in Arizona can vary widely based on several factors:
- Complexity of Assets: Cases involving complex assets like real estate, businesses, or multiple sources of income often require more intricate legal work, leading to higher attorney fees.
- Contested Proceedings: If your bankruptcy filing is likely to be contested by creditors, the legal proceedings can become more complex and time-consuming, increasing attorney fees.
- Experience and Reputation: Attorneys with a proven track record of success and extensive experience in bankruptcy law may command higher fees due to their specialized knowledge and skills.
- Payment Structures: Many attorneys offer flexible payment options, such as monthly installments or flat fees, to make legal representation accessible to a wider range of clients.
It’s crucial to discuss fee structures and payment options with potential attorneys upfront to avoid any surprises or misunderstandings.
Court Filing Fees: Beyond the Basics
The initial filing fee is just one aspect of the court costs associated with bankruptcy. Additional fees may arise during the proceedings, including:
- Motions and Hearings: Each motion or hearing filed with the court often incurs a separate fee. These can accumulate depending on the complexity of your case.
- Trustee Fees: In Chapter 7 and Chapter 13 bankruptcies, trustees are appointed to oversee the case and ensure compliance with bankruptcy laws. Trustee fees are typically deducted from the debtor’s estate or paid through the Chapter 13 repayment plan.
- Administrative Costs: The court may charge administrative fees for various services, such as document processing, record retrieval, and court reporting.
It’s important to factor in these potential additional costs when budgeting for your bankruptcy.
Mandatory Classes: Understanding the Requirements
Both pre-filing credit counseling and post-filing debtor education are mandatory for individuals filing for bankruptcy. While some providers offer these courses for free or at reduced rates, it’s important to research and compare options to find the most cost-effective solution.
Consider factors such as course length, format (online or in-person), and accreditation when choosing a provider. Completing these courses is a crucial step in the bankruptcy process, as failure to do so can result in the dismissal of your case.
Hidden Costs: Unforeseen Expenses
Bankruptcy can also lead to some unexpected expenses that individuals may not initially consider. Reaffirmation agreements often involve legal fees and additional court costs. These can include:
- Reaffirmation Agreements: If you wish to keep certain secured debts, such as a car loan or mortgage, you may need to enter into a reaffirmation agreement with the creditor. These agreements often involve legal fees and additional court costs.
- Credit Report Monitoring: After bankruptcy, it’s crucial to monitor your credit report for accuracy and to track your progress toward rebuilding your credit. Credit monitoring services typically involve monthly or annual fees.
- Financial Counseling: Seeking professional financial counseling after bankruptcy can be a valuable investment in preventing future financial difficulties and establishing healthy financial habits.
Planning for Post-Bankruptcy Finances
While bankruptcy can provide much-needed relief from debt, it’s essential to plan for your financial future. Creating a budget, prioritizing savings, and rebuilding your credit should be top priorities after bankruptcy. Consider seeking guidance from a financial advisor or credit counselor to develop a comprehensive financial plan that aligns with your goals and values.
By understanding the full scope of bankruptcy costs and proactively planning for your financial future, you can navigate the bankruptcy process with confidence and emerge with a stronger financial foundation.
Chapter Choice and Your Financial Future
The decision between Chapter 7 and Chapter 13 bankruptcy is not merely a matter of cost. Each chapter has distinct implications for your financial future, and understanding these differences is key to making an informed decision.
- Chapter 7: The “Fresh Start” Bankruptcy: Chapter 7 is designed for individuals with limited income who cannot feasibly repay their debts. It involves liquidating non-exempt assets to pay off creditors, and most remaining unsecured debts are discharged. However, Chapter 7 can have a more significant impact on your credit score and may not be suitable for everyone.
- Chapter 13: The “Reorganization” Bankruptcy: Chapter 13 is aimed at individuals with regular income who can manage a structured repayment plan. It allows you to catch up on missed payments, potentially reduce the total amount owed, and protect certain assets. While Chapter 13 typically takes longer and may involve higher overall costs, it can offer a more comprehensive solution for those who want to retain their property and improve their financial standing.
Understanding the Emotional Impact of Bankruptcy
Filing for bankruptcy can be a stressful and emotional experience. Many individuals experience feelings of shame, guilt, or anxiety during the process. However, it’s important to remember that bankruptcy is a legal tool designed to provide a fresh start and alleviate financial burdens.
Seeking support from family, friends, or a therapist can be invaluable during this time. Additionally, connecting with others who have gone through similar experiences can provide a sense of community and understanding.
Beyond Bankruptcy: Rebuilding Your Financial Health
While bankruptcy can provide immediate relief from debt, it’s essential to view it as a stepping stone towards a healthier financial future. Consider these strategies for rebuilding your financial health after bankruptcy:
- Budgeting: Create a realistic budget that prioritizes essential expenses, savings, and debt repayment.
- Credit Counseling: Seek guidance from a reputable credit counselor to develop healthy financial habits and learn strategies for managing money effectively.
- Credit Monitoring: Regularly monitor your credit report for errors and track your progress towards improving your credit score.
- Savings: Establish an emergency fund to cover unexpected expenses and avoid future debt accumulation.
By proactively managing your finances and seeking guidance when needed, you can emerge from bankruptcy with a renewed sense of financial empowerment and a brighter future ahead.
Contact Our Arizona Bankruptcy Law Firm
Are you in a tough financial spot right now and considering filing for bankruptcy anywhere in Arizona? Do not wait to get in touch with DebtBusters because we pride ourselves on being the friendliest Arizona bankruptcy lawyers in the state. We offer a free bankruptcy consultation to discuss your specific situation at no cost.
Our firm regularly helps people all over Arizona file for Chapter 7 and Chapter 13 bankruptcy. A Phoenix bankruptcy lawyer from our team can assist you in determining the type of bankruptcy suitable for your situation. Call (866) 223-4395 or contact us online to schedule a free consultation with our Arizona bankruptcy law firm.
