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Economists like to say that people with few assets are “cost-sensitive,” because a few extra dollars on a co-pay may be the difference between going to the doctor and ignoring a health problem. Since cash is often scarce among bankruptcy debtors, they nearly always want to know how much it costs to file bankruptcy at their first appointment. Court filing fees are almost completely non-negotiable, although the court will consider a payment plan, in some circumstances.
The pre-filing window is also a good time to consider some other technical bankruptcy aspects, such as taking a required class and gathering required documents, so the process will run more smoothly once the voluntary petition is on file and you won’t have to scramble around to find financial paperwork.
How Much It Costs to File Bankruptcy at the Start
Bankruptcy filing fees are usually the same in both Washington and Oregon, since bankruptcy is a federal court procedure. As of December 1, 2016, the initial filing fees are:
- $335 for a Chapter 7 liquidation bankruptcy
- $310 for a Chapter 13 repayment bankruptcy
Because the filing volume has dipped in the last few years, filing fees sometimes increase more often than they used to, so courts can keep up with costs without siphoning tax dollars away from other areas.
How Much It Costs to File Bankruptcy in Payment Plans
If money is an issue, and it often is, most courts in both Oregon and Washington will allow you to pay the initial filing fee in installments, provided that you complete an affidavit that shows a financial need. In Chapter 7 bankruptcies, the court will normally accept three monthly payments of $111, $111, and $112; in Chapter 13 bankruptcies, most debtors can make two payments of $125 and $165. The first payment is always due with the initial paperwork.
When thinking about how much it costs to file bankruptcy and payment plans, there are a few things to remember. First, many courts do not accept credit or debit cards over the phone or online, and they definitely never set up automatic bank drafts. That usually means you must put a check or money order in the mail, and even if it gets lost in the mail or gets delivered to the wrong place, the court usually never accepts any excuses. Second, since many courts do not particularly like to keep up with payment plans, they usually dismiss cases for nonpayment a day or two after the deadline passes, and there is usually no mercy.
Shortly after filing, the court always sends a payment schedule through the mail, but since it comes in a very thin envelope, it is easy to misplace. So, it is best to satisfy the installment arrangement as soon as possible, because there is no penalty for early payment.
Ancillary Filing Fees
The final amount of how much it costs to file bankruptcy sometimes changes over time, because the court may assess additional fees after the case is filed. Some of them include:
- Conversion: As of December 1, 2016, clerks charge $25 to convert a Chapter 13 to a Chapter 7.
- Reopening: If a bankruptcy is dismissed, the clerks charge $260 to reopen a Chapter 7 and $235 to reopen a Chapter 13. No payment plan is available, in most cases. Moreover, if there is any unpaid balance from the initial filing fee, the clerk will want that money in addition to the reopening fee.
- Schedule Amendments: It is very important that the petition and schedules be accurate when they are filed. This is because the clerks normally charge $31 per change to amend them later.
The clerks also charge for some hearing transcripts, photocopies, returned checks, and almost any other service.
Other Pre-Filing Activities
When considering how much it costs to file bankruptcy, you must think about the time costs as well. All debtors must complete a debt counselling course before filing. Fortunately, the class is available online and only takes a few minutes. Your attorney can give you a list of approved courses to choose from.
Before the 341 creditors’ meeting, the trustee (person who oversees the bankruptcy on behalf of the judge) will probably want copies of various documents, such as:
- Last year’s income tax return
- Drivers’ license
- Social Security card
- Bank statements
- Insurance policy declaration pages
- Domestic support orders
- Deed and title documents
- Leases
- Profit/loss sheets
The first three items in this list are mandatory. Moreover, the trustee has the discretion to ask for any of the remaining documents. As the bankruptcy debtor, you have a duty to cooperate with the trustee in this area. Failure to turn over requested documents is grounds for a with-prejudice dismissal.
Talk to a Debt Lawyer About How Much It Costs to File Bankruptcy
If you are overwhelmed by debt and want to get a fresh start, learn more about how much it costs to file bankruptcy by calling the Northwest Debt Relief Law Firm today.
The original post is titled How Much It Costs to File Bankruptcy , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .
Looking Back on HAMP and Forward on Student Loan Relief Congress should soon take a look at fastest growing category of consumer debt—student loans. During the 2016 Presidential election, Donald Trump added his voice to the chorus of Democratic law makers, led by Senator Elizabeth Warren, to provide student loan relief. President Trump was elected on […]The post Trump Republicans and Student Loans: Don’t Follow Obama’s HAMP by Robert Weed appeared first on Robert Weed.
The Home Affordable Modification Program (HAMP) expired December 31st. After eight years of assisting underwater homeowners save their homes from foreclosure, the program has now ended.
Approximately 10 million homes were lost to foreclosure in the past decade. HAMP helped lessen the mortgage meltdown, but its job is now complete. Foreclosure sales have diminished and home prices are now almost equal to the market prices just prior to the housing market bubble bursting in 2008.
So now what?
According to the folks I chat to in the foreclosure industry, expect mortgage service companies to tighten standards and foreclosures to gradually increase during 2017.
Without HAMP, homeowners seeking loan modification will be left at the mercy of lenders.” Dillon Graham, Florida foreclosure defense attorney.
The Consumer Financial Protection Bureau has issued lending guidelines to help reduce the number of foreclosures in the future, including an emphasis on loan affordability, but those guidelines will do little to help current homeowners who fall behind on their mortgage payment.
I expect to see a new foreclosure trend emerging in 2017:
- Banks will be quicker to initiate foreclosure actions when a homeowner falls 2 to 3 payments behind.
- Foreclosure Forbearance Agreements will emerge from an 8-year hibernation and be the primary loss mitigation tool offered by mortgage lenders.
- Chapter 13 bankruptcy case filings will increase as it provides the the best option to give homeowners 3 to 5 years to cure delinquent mortgage payments.
- Foreclosures on long-forgotten 2nd mortgage debts will pick up as surging home prices enable banks to recoup some recovery for loans previously underwater.
This cat is now away. Time for the mice to play again?
Image courtesy of Flickr and frankieleon.
The Home Affordable Modification Program (HAMP) expired December 31st. After eight years of assisting underwater homeowners save their homes from foreclosure, the program has now ended.
Approximately 10 million homes were lost to foreclosure in the past decade. HAMP helped lessen the mortgage meltdown, but its job is now complete. Foreclosure sales have diminished and home prices are now almost equal to the market prices just prior to the housing market bubble bursting in 2008.
So now what?
According to the folks I chat to in the foreclosure industry, expect mortgage service companies to tighten standards and foreclosures to gradually increase during 2017.
Without HAMP, homeowners seeking loan modification will be left at the mercy of lenders.” Dillon Graham, Florida foreclosure defense attorney.
The Consumer Financial Protection Bureau has issued lending guidelines to help reduce the number of foreclosures in the future, including an emphasis on loan affordability, but those guidelines will do little to help current homeowners who fall behind on their mortgage payment.
I expect to see a new foreclosure trend emerging in 2017:
- Banks will be quicker to initiate foreclosure actions when a homeowner falls 2 to 3 payments behind.
- Foreclosure Forbearance Agreements will emerge from an 8-year hibernation and be the primary loss mitigation tool offered by mortgage lenders.
- Chapter 13 bankruptcy case filings will increase as it provides the the best option to give homeowners 3 to 5 years to cure delinquent mortgage payments.
- Foreclosures on long-forgotten 2nd mortgage debts will pick up as surging home prices enable banks to recoup some recovery for loans previously underwater.
This cat is now away. Time for the mice to play again?
Image courtesy of Flickr and frankieleon.
Persons filing for bankruptcy in Florida generally use the exemptions provided by Florida law in the Florida Constitution, Florida Statutes and common law. Certain further exemptions are also provided by non-bankruptcy federal law.
Exemption
Certain real property, such as a homestead, and personal property are "exempt" - that is, exempt from administration by a chapter 7 bankruptcy trustee or otherwise not taken into consideration in a chapter 13 as to the amount required to be repaid to unsecured creditors.
Homestead
Article X, section 4 of the Florida Constitution provides for the exemption of a Florida homestead with an unlimited value. The maximum size of the land is limited to 1/2 acre if located within a municipality and 160 if located outside of a municipality.
Personal property of $l,000.00 and $4,000.00 value
Each debtor may "exempt" $l,000.00 of personal property. Another statute also allows each debtor to “exempt” a further $4,000.00 of personal property if he does not claim or receive the benefits of a Florida homestead exemption.
Cars and other Motor Vehicles
In addition to the above general personal property exemption, $l,000.00 in equity, in one car (two for a joint case) or other motor vehicle (such as a motorcycle, truck, trailer, semi-trailer, truck tractor, semi-trailer combination, recreational vehicle, etc.) is "exempt" from the bankruptcy estate. Often this is not even used as many vehicles have no net value (equity) as more is owed on them than they are worth (i.e. you are "upside down"). During and after the bankruptcy, you must, of course, continue to make any payment due for a lien on the vehicle.
Pension Plans, IRAs, and other Retirement Plans
Pension plans, I.R.A.'s, and other retirement plans are generally not part of the estate or may be exempted from the estate (including under the exemption provided in the Bankruptcy Code itself 522 (b)(3)(C)) .
Earned Income Credit Refund
An interest in an IRS earned income credit ("EIC") whether received or yet to be received is exempt. It also applies to funds in a bank account traceable to such EIC. This exemption does not apply to collection for child support or spousal support.Jordan E. Bublick - Miami Bankruptcy Lawyer - North Miami & Kendall Offices - (305) 891-4055 - www.bublicklaw.com
Persons filing for bankruptcy in Florida generally use the exemptions provided by Florida law in the Florida Constitution, Florida Statutes and common law. Certain further exemptions are also provided by non-bankruptcy federal law.
Exemption
Certain real property, such as a homestead, and personal property are "exempt" - that is, exempt from administration by a chapter 7 bankruptcy trustee or otherwise not taken into consideration in a chapter 13 as to the amount required to be repaid to unsecured creditors.
Homestead
Article X, section 4 of the Florida Constitution provides for the exemption of a Florida homestead with an unlimited value. The maximum size of the land is limited to 1/2 acre if located within a municipality and 160 if located outside of a municipality.
Personal property of $l,000.00 and $4,000.00 value
Each debtor may "exempt" $l,000.00 of personal property. Another statute also allows each debtor to “exempt” a further $4,000.00 of personal property if he does not claim or receive the benefits of a Florida homestead exemption.
Cars and other Motor Vehicles
In addition to the above general personal property exemption, $l,000.00 in equity, in one car (two for a joint case) or other motor vehicle (such as a motorcycle, truck, trailer, semi-trailer, truck tractor, semi-trailer combination, recreational vehicle, etc.) is "exempt" from the bankruptcy estate. Often this is not even used as many vehicles have no net value (equity) as more is owed on them than they are worth (i.e. you are "upside down"). During and after the bankruptcy, you must, of course, continue to make any payment due for a lien on the vehicle.
Pension Plans, IRAs, and other Retirement Plans
Pension plans, I.R.A.'s, and other retirement plans are generally not part of the estate or may be exempted from the estate (including under the exemption provided in the Bankruptcy Code itself 522 (b)(3)(C)) .
Earned Income Credit Refund
An interest in an IRS earned income credit ("EIC") whether received or yet to be received is exempt. It also applies to funds in a bank account traceable to such EIC. This exemption does not apply to collection for child support or spousal support.Jordan E. Bublick - Miami Bankruptcy Lawyer - North Miami & Kendall Offices - (305) 891-4055 - www.bublicklaw.com
Persons filing for bankruptcy in Florida generally use the exemptions provided by Florida law in the Florida Constitution, Florida Statutes and common law. Certain further exemptions are also provided by non-bankruptcy federal law.
Exemption
Certain real property, such as a homestead, and personal property are "exempt" - that is, exempt from administration by a chapter 7 bankruptcy trustee or otherwise not taken into consideration in a chapter 13 as to the amount required to be repaid to unsecured creditors.
Homestead
Article X, section 4 of the Florida Constitution provides for the exemption of a Florida homestead with an unlimited value. The maximum size of the land is limited to 1/2 acre if located within a municipality and 160 if located outside of a municipality.
Personal property of $l,000.00 and $4,000.00 value
Each debtor may "exempt" $l,000.00 of personal property. Another statute also allows each debtor to “exempt” a further $4,000.00 of personal property if he does not claim or receive the benefits of a Florida homestead exemption.
Cars and other Motor Vehicles
In addition to the above general personal property exemption, $l,000.00 in equity, in one car (two for a joint case) or other motor vehicle (such as a motorcycle, truck, trailer, semi-trailer, truck tractor, semi-trailer combination, recreational vehicle, etc.) is "exempt" from the bankruptcy estate. Often this is not even used as many vehicles have no net value (equity) as more is owed on them than they are worth (i.e. you are "upside down"). During and after the bankruptcy, you must, of course, continue to make any payment due for a lien on the vehicle.
Pension Plans, IRAs, and other Retirement Plans
Pension plans, I.R.A.'s, and other retirement plans are generally not part of the estate or may be exempted from the estate (including under the exemption provided in the Bankruptcy Code itself 522 (b)(3)(C)) .
Earned Income Credit Refund
An interest in an IRS earned income credit ("EIC") whether received or yet to be received is exempt. It also applies to funds in a bank account traceable to such EIC. This exemption does not apply to collection for child support or spousal support.Jordan E. Bublick - Miami Bankruptcy Lawyer - North Miami & Kendall Offices - (305) 891-4055 - www.bublicklaw.com
Persons filing for bankruptcy in Florida generally use the exemptions provided by Florida law in the Florida Constitution, Florida Statutes and common law. Certain further exemptions are also provided by non-bankruptcy federal law.
Exemption
Certain real property, such as a homestead, and personal property are "exempt" - that is, exempt from administration by a chapter 7 bankruptcy trustee or otherwise not taken into consideration in a chapter 13 as to the amount required to be repaid to unsecured creditors.
Homestead
Article X, section 4 of the Florida Constitution provides for the exemption of a Florida homestead with an unlimited value. The maximum size of the land is limited to 1/2 acre if located within a municipality and 160 if located outside of a municipality.
Personal property of $l,000.00 and $4,000.00 value
Each debtor may "exempt" $l,000.00 of personal property. Another statute also allows each debtor to “exempt” a further $4,000.00 of personal property if he does not claim or receive the benefits of a Florida homestead exemption.
Cars and other Motor Vehicles
In addition to the above general personal property exemption, $l,000.00 in equity, in one car (two for a joint case) or other motor vehicle (such as a motorcycle, truck, trailer, semi-trailer, truck tractor, semi-trailer combination, recreational vehicle, etc.) is "exempt" from the bankruptcy estate. Often this is not even used as many vehicles have no net value (equity) as more is owed on them than they are worth (i.e. you are "upside down"). During and after the bankruptcy, you must, of course, continue to make any payment due for a lien on the vehicle.
Pension Plans, IRAs, and other Retirement Plans
Pension plans, I.R.A.'s, and other retirement plans are generally not part of the estate or may be exempted from the estate (including under the exemption provided in the Bankruptcy Code itself 522 (b)(3)(C)) .
Earned Income Credit Refund
An interest in an IRS earned income credit ("EIC") whether received or yet to be received is exempt. It also applies to funds in a bank account traceable to such EIC. This exemption does not apply to collection for child support or spousal support.Jordan E. Bublick - Miami Bankruptcy Lawyer - North Miami & Kendall Offices - (305) 891-4055 - www.bublicklaw.com
The existence of a Federal Tax Lien in a Chapter 7 bankruptcy case is a dangerous thing. Especially in cases where a debtor has substantial equity in a home or other assets.
Why are tax liens so dangerous? Because property exemption laws, such as the Homestead Exemption, do not apply to federal tax liens.
Exemption laws protect a debtor’s property when they file bankruptcy. For example, the Nebraska Homestead Exemption protects up to $60,000 of home equity (the difference between the home’s value and the balance of the mortgage). So, if a debtor owns a home worth $100,000 and the home is subject to a mortgage loan of $40,000, the home is generally protected in chapter 7, unless a federal tax lien is present.
What is alarming is that most bankruptcy attorneys seem to be oblivious to the fact that federal tax liens are not subject to state exemption laws. In fact, I have spoken to attorneys who falsely believe a federal tax lien actually protects a home since the lien takes away the home equity. Yes, the lien takes away equity, but it also puts a mighty power in the hands of the Chapter 7 Trustee.
What drives this dangerously false idea of a tax lien protecting property is that few attorneys have witnessed a bankruptcy trustee use the power of bankruptcy code Section 724(b). I’ve never seen a Nebraska trustee tap the power of 724(b), nor is there any case I’ve seen in Nebraska where a trustee took away a home with this power. Yet, cases exist in other jurisdictions where debtors have lost homes due to the trustee’s use of 724(b).
Martin and Elvira Laredo owned a home in Illinois valued at $320,235 that was subject to a mortgage loans of $245,000. They owed the IRS $282,268 and reported that a federal tax lien was filed against their home. The debtors claimed a $15,000 homestead exemption. In re Laredo, 334 B.R. 401 (2005). The Chapter 7 Trustee motioned the court for a ruling to determine that the homestead exemption was subordinate to the federal tax lien and the administrative expenses the trustee would incur in selling the home. The court agreed with the trustee and ordered the home sold even though the only parties who benefited were the IRS and the Trustee.
This result should not surprise bankruptcy attorneys. Those who represent debtors in Chapter 13 cases should be aware that the IRS will file a secured claim on exempt property when federal tax liens are present. So, why would the result in a Chapter 7 be any different? In theory, the payments to creditors in Chapter 13 should be no less than payments made in Chapter 7 under what is known as the “best interest of creditors test“, so this result should not be surprising.
At least one Nebraska case has spoken to the power of 724(b), In re Netal, Inc., Case #09-82992.
I suspect the reason we do not see Chapter 7 Trustee’s use the power of 724(b) more is that although the bankruptcy schedules may report that federal tax debts are present, they debtor may not be reporting that a federal tax lien has been filed prior to the bankruptcy. The debtor’s attorney may also be unaware of the presence of the tax lien unless they perform a public records search. However, given the duty of a bankruptcy attorney to perform a “due diligence” investigation of the debtor’s assets, income and debts, there is probably a duty to search for and report the existence of such liens. Also, unless the Trustee seeks out independent confirmation of the existence of the lien, he or she may be ignorant of its presence. A smart trustee should assume the presence of a tax lien when substantial tax debt is reported even if the lien itself is not disclosed.
A second reason for the lack of 724(b) seizures in Nebraska is the lack of prior history of using this tool. There is no tradition of 724(b) property seizures in Nebraska, but I suspect that tradition will change over time, especially in a rising housing market.
In conclusion, when substantial tax debts exist, be careful when filing Chapter 7. Choose your Nebraska bankruptcy attorney carefully.
The existence of a Federal Tax Lien in a Chapter 7 bankruptcy case is a dangerous thing. Especially in cases where a debtor has substantial equity in a home or other assets.
Why are tax liens so dangerous? Because property exemption laws, such as the Homestead Exemption, do not apply to federal tax liens.
Exemption laws protect a debtor’s property when they file bankruptcy. For example, the Nebraska Homestead Exemption protects up to $60,000 of home equity (the difference between the home’s value and the balance of the mortgage). So, if a debtor owns a home worth $100,000 and the home is subject to a mortgage loan of $40,000, the home is generally protected in chapter 7, unless a federal tax lien is present.
What is alarming is that most bankruptcy attorneys seem to be oblivious to the fact that federal tax liens are not subject to state exemption laws. In fact, I have spoken to attorneys who falsely believe a federal tax lien actually protects a home since the lien takes away the home equity. Yes, the lien takes away equity, but it also puts a mighty power in the hands of the Chapter 7 Trustee.
What drives this dangerously false idea of a tax lien protecting property is that few attorneys have witnessed a bankruptcy trustee use the power of bankruptcy code Section 724(b). I’ve never seen a Nebraska trustee tap the power of 724(b), nor is there any case I’ve seen in Nebraska where a trustee took away a home with this power. Yet, cases exist in other jurisdictions where debtors have lost homes due to the trustee’s use of 724(b).
Martin and Elvira Laredo owned a home in Illinois valued at $320,235 that was subject to a mortgage loans of $245,000. They owed the IRS $282,268 and reported that a federal tax lien was filed against their home. The debtors claimed a $15,000 homestead exemption. In re Laredo, 334 B.R. 401 (2005). The Chapter 7 Trustee motioned the court for a ruling to determine that the homestead exemption was subordinate to the federal tax lien and the administrative expenses the trustee would incur in selling the home. The court agreed with the trustee and ordered the home sold even though the only parties who benefited were the IRS and the Trustee.
This result should not surprise bankruptcy attorneys. Those who represent debtors in Chapter 13 cases should be aware that the IRS will file a secured claim on exempt property when federal tax liens are present. So, why would the result in a Chapter 7 be any different? In theory, the payments to creditors in Chapter 13 should be no less than payments made in Chapter 7 under what is known as the “best interest of creditors test“, so this result should not be surprising.
At least one Nebraska case has spoken to the power of 724(b), In re Netal, Inc., Case #09-82992.
I suspect the reason we do not see Chapter 7 Trustee’s use the power of 724(b) more is that although the bankruptcy schedules may report that federal tax debts are present, they debtor may not be reporting that a federal tax lien has been filed prior to the bankruptcy. The debtor’s attorney may also be unaware of the presence of the tax lien unless they perform a public records search. However, given the duty of a bankruptcy attorney to perform a “due diligence” investigation of the debtor’s assets, income and debts, there is probably a duty to search for and report the existence of such liens. Also, unless the Trustee seeks out independent confirmation of the existence of the lien, he or she may be ignorant of its presence. A smart trustee should assume the presence of a tax lien when substantial tax debt is reported even if the lien itself is not disclosed.
A second reason for the lack of 724(b) seizures in Nebraska is the lack of prior history of using this tool. There is no tradition of 724(b) property seizures in Nebraska, but I suspect that tradition will change over time, especially in a rising housing market.
In conclusion, when substantial tax debts exist, be careful when filing Chapter 7. Choose your Nebraska bankruptcy attorney carefully.
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