If you are overwhelmed by debt, filing bankruptcy is often the best possible solution. A successful bankruptcy can wipe out all of your unsecured debt and give you a fresh start financially. Unfortunately, the process of filing for bankruptcy is not free. Between attorney’s fees and court filing fees bankruptcy can be pretty expensive, which is a major concern for people who are already under financial stress.
In this post, we will look at how much it can cost to file for bankruptcy in Maryland. We will look at the going rate currently charged by Maryland bankruptcy attorneys and the filing fees for both Chapter 7 and Chapter 13 bankruptcy.
Court Filing Fees for Bankruptcy
Whether or not you use an attorney to file your bankruptcy, the one fixed cost that usually cannot be avoided when filing bankruptcy is the filing fee. The filing fee is the amount that must be paid to the bankruptcy court up front in every case that gets filed. The bankruptcy filing fees are used to cover the costs of the various services provided by the bankruptcy court.
The filing fees for a bankruptcy case are very high compared to filing fees charged for other types of court cases. The current filing fees for a bankruptcy petition are follows:
Chapter 7 = $338
Chapter 13 = $313
The filing must be paid to the Clerk of the Bankruptcy Court in your district either at the time that the bankruptcy petition is filed or within 7 days after the petition is filed. If your filing fee is not paid, you will receive 1 notice from the Clerk’s office notifying you that your fee needs to be paid. If the fee remains unpaid your bankruptcy case will be automatically dismissed.
Waiver of Filing Fee in Chapter 7
Debtors that have almost no financial resources and literally cannot afford to pay the $338 filing fee for a Chapter 7 bankruptcy can filed a petition asking the Court to waive the filing based on financial need. The fee waiver application form must completed and filed shortly after the bankruptcy case is filed. The waiver of the filing fee is based on a strict income threshold, so if you make too much money you won’t qualify for the waiver. Fee waivers are not available in Chapter 13.
- Ins and outs of Maryland bankruptcy law
How Much Do Maryland Bankruptcy Lawyers Charge?
Filing for bankruptcy is a complicated and difficult process. Although you can represent yourself, most people hire a lawyer to handle their bankruptcy. So how much does it cost to hire a bankruptcy lawyer in Maryland? Bankruptcy lawyers charge flat fees based on what type of bankruptcy you are filing (Chapter 7 vs. Chapter 13). These fees are normally the same for all clients, but sometimes lawyers will quote you a higher fees if your case is particularly complicated or will involve more work.
It is important to understand that in most cases, the filing fee that the bankruptcy attorney charges does NOT include the filing fee paid to the bankruptcy court. So if the attorney’s fee is $1,200 for a chapter, you will actually have to pay $1,538 ($1,200 for the attorney and $338 for the filing fee).
Average Bankruptcy Lawyer Fee for Chapter 7 Bankruptcy
In Maryland the average lawyer fee for a Chapter 7 bankruptcy is around $1,000 to $1,500. You can find some lawyers who will handle a Chapter 7 for significantly cheaper. At least 1 bankruptcy lawyer in Baltimore is currently offering Chapter 7 fees as low as $600. Some attorneys will also charge as high as $2,500 for Chapter 7. But the majority of Chapter 7 fees charged by Maryland lawyers are in the $1,200 range.
The bankruptcy code requires all debtors to file a Disclosure of Compensation in their bankruptcy case which fully discloses the fee paid to their bankruptcy attorney. Below is a list of some of the fees disclosed in Chapter 7 cases filed in Maryland in the first week of May 2023.
|AMOUNT OF FEE||LAWYER|
|$1,000||Nicolas Del Pizzo|
Average Bankruptcy Lawyer Fee for Chapter 13
The attorneys fees for a Chapter 13 bankruptcy are significantly higher compared to a Chapter 7. The reason is because Chapter 13 bankruptcies involve 3 times the amount of work for the lawyer compared to a Chapter 7 case. The other reason the fees in Chapter 13 are higher is because only part of the lawyer’s fee is paid upfront, with the remainder of the fee paid in monthly installment through the Chapter 13 repayment plan.
The attorneys fees for a Chapter 13 case are also more or less standardized. This is because there is sort of a pre-set maximum amount that the Chapter 13 Trustees and the Bankruptcy Court have agreed to allow for attorneys fees in Chapter 13 plan and this ends up acting like the standard fee. It increases periodically, but currently the standard attorney fee for a Chapter 13 bankruptcy in Maryland is $6,000.
What does vary is how much of this $6,000 fee it paid up front, versus how much is paid monthly through the bankruptcy repayment plan. Most lawyers require an upfront payment of $1,200 to $2,000 with the balance paid in the plan. The chart below shows the Chapter 13 fees charged (both upfront and through the plan) in 3 Chapter 13 bankruptcy cases filed in Maryland in the first week of May 2023.
|TOTAL FEE / PAID UPFRONT||LAWYER|
|$6,000 / $2,000||Bennie Brooks|
|$6,000 / $1,500||Michael Coyle|
|$6,000 / $1,500||James Logan|