What Are The Costs Associated With Filing Chapter 13?

This video talks about the costs associated with filing a Chapter 13 bankruptcy case.

David Siegel:               What is it, other than paying the stuff back, what is it going to cost me in terms of attorney’s fees, court filing fees and I’m just guessing that the trustee is going to have to be paid.

Jesse Barrientes:         Right.  The way it works right now and this is forever changing, the filing fee for a Chapter 13, anywhere in the country, the court cost is $281.  The attorney’s fees are going to vary by jurisdiction.  But here in the northern district of Illinois, the judges have adopted what’s known as a model retention agreement which provides for a flat fee of $4000 over the life of the case to your attorney.  Now this means whatever happens in your case, whether it’s a simple case or the most difficult case, your attorneys fees under that model retention agreement, are capped at $4000.  And they are paid out over the life of the plan.  So it’s going to be affordable for you because it’s going to be based on your budget and the attorney is going to get paid out of your trustee payment.

Jesse Barrientes:         As long as it concludes, as long as you conclude your case or you finish it up, correct?

 David Siegel:               Right, well, actually your attorney might get paid quicker depending on how much your plan payment is.  But the bottom line is, a lot of attorneys will do a case for $281 down which is just the court cost and then accept their attorneys fees over the life of the case.  So it really gives someone struggling an opportunity to get their foot in the door, get the Chapter 13 going, get the protection from their creditors, get the benefit of the automatic stay and pay their creditors as its rolling.

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