2020 UPDATE: you can view the 2014 article here.
Filing Chapter 7 bankruptcy in California can be expensive at a time when individuals can least afford the expense. However, filing chapter 7 bankruptcy in Sacramento can be cheaper than in other areas of California. This is due in part to the number of low-cost bankruptcy firms like Sacramento Law Group LLP and the ability to pay the $335 court filing fee in installments.
Bankruptcy Attorney Fees
With the number of bankruptcy attorneys in Sacramento, you would think there would be more price competition. Unfortunately, while there are many bankruptcy attorneys, there are only a handful of attorneys who have a regular presence in Sacramento bankruptcy court. In other words, while there are many attorneys who file the occasional bankruptcy petition, only a few have the marketing and experience to be a frequent-filer in Sacramento.
The largest expense in filing chapter 7 bankruptcy will be your attorney fees. Many bankruptcy attorneys charge anywhere from $1,200 to $2,000 in attorney fees for chapter 7 bankruptcy. In contrast, low-cost bankruptcy attorney Adam Garcia on https://sacramentobankruptcylawyer.us/ only charges $900 for chapter 7 bankruptcy. With that said, he and other attorneys may charge more for cases involving real estate, businesses, tax debt, etc.
Many bankruptcy attorneys claim you can hire them and ‘start the process’ for only a few hundred dollars. This transaction can be labeled as a down-payment or “retainer fee” but in truth, it won’t secure the client meaningful debt relief. While yes, after signing the representation agreement and paying the bankruptcy attorney a few hundred dollars the client will have technically ‘hired’ the attorney and started the bankruptcy process, it won’t help the client much apart from referring creditors to the bankruptcy attorney. That’s because a bankruptcy case cannot be filed until the attorney fees are paid in full. If the attorney fees weren’t paid in full before filing the bankruptcy petition the attorney would be discharging their own fee; not a sound business practice.
Instead of retaining an expensive bankruptcy attorney for a few hundred dollars and thereafter making payments for attorney fees, try hiring a lower cost bankruptcy attorney you can afford right away. After paying the attorney fees and providing the required documents, the attorney should be able to file your case within a month.
$335 Court Filing Fee
The next largest expense is the $335 court filing fee. It’s best to pay this expense upfront to your attorney so the filing fee can be paid at the time of filing your petition. However, the Eastern District of California which includes Sacramento allows chapter 7 bankruptcy petitioners to request a filing fee installment plan that will put them on a 4-month payment plan. once approved, the client will pay $83.75 per month to the court for 4 months after filing the case. In severe cases with individuals experiencing extreme poverty, the court may even waive the filing fee, although approval of this fee waiver is the exception rather than the norm in chapter 7 bankruptcy.
Credit counseling is a small expense and ranges from $8 to $30. There are many online providers who charge less than telephonic providers. If you’re taking the course online choose a provider who charges $15 or less.