|How Much Will Bankruptcy Cost Under the New Law?
Ticket In Cost
The "ticket in" is simple a credit counseling session that the person wishing to file bankruptcy must attend. You must attend this credit counseling session six months prior to applying for bankruptcy. Also, the credit counseling session must be done by a non-profit agency that has been approved by the United States Trustees office.
This session usually lasts 90 minutes, and varies in cost from free to $50. It is available in person, over the phone, and on the internet. Some bankruptcy attorneys will allow you to complete this counseling in their office. See the approved providers
Means Test Cost
Currently, the bankruptcy court determines whether or not you can qualify for chapter 7 bankruptcy. Under the new law, your income will be tested by a two-part "means test." The first test is a formula that exempts certain expenses (rent, food, etc.) to determine if you can afford to pay 25 percent of your unsecured debt, such as credit card bills. Next, your income will be compared to your state's average income.
Most companies are providing this service for free. Most of these companies provide the counseling, the education course, or both.
Ticket Out Cost
The "ticket out" for the new bankruptcy law is attending some type of financial education class. You must attend the financial education class given by an approved provider before your bankruptcy can be finalized. The United States Trustees Office decides which education providers are officially approved for the Ticket Out Education.
Most courses are two hours long in a video or web format. These courses usually cost $30 to $50 to purchase. See the approved providers
Court Cost and Attorney Fees
This is often the most expensive part of filing bankruptcy. Chapter 7, often called Liquidation or Discharge, typically costs $700 to $1,000 with payment required up front. Chapter 13, often called Adjustment or Restructuring, usually costs $1,800 to $2,000, with the cost worked into the repayment plan. These attorney fees usually inlcude the court costs, which usually costs $200 to $300.
Some attorneys are also charging $200 to $300 to set up your paperwork for the Ticket In counseling session, which inlcudes your income sources, your budget, and your list of debts.