Q: What is the cost of filing for bankruptcy relief?

A: Debtors should anticipate various charges and fees. Debtors are required to complete a credit counseling analysis from an approved credit counseling agency. The fees average $50.00 per debtor for this service. Some agencies including Debt Education and Certification Foundation and Garden State Consumer Credit Counseling, Inc., offer special rates for married couples.** 

Debtors must also complete a personal financial management course from an approved credit counseling agency. The cost of this course averages $50.00 per debtor. Again, some agencies offer special rates for married couples. The fees may also be waived for individuals of limited means.

The Nevada Bankruptcy Court currently charges a filing fee of $299.00 for a Chapter 7 case or $274.00 for a Chapter 13 case.

The cost of retaining an attorney varies and depends primarily on the complexity of a case, the chapter under which the bankruptcy is filed, and the cooperation of the debtor(s). Individuals who cannot afford an attorney may qualify for free legal representation through Legal Aid of Southern Nevada, Washoe Legal Services, or the State Bar of Nevada.  

**Disclaimer:  Debtors should verify that a particular agency is approved by the United States Department of Justice and inquire about all applicable fees prior to contracting for its services.

Q:  What do you charge for a basic chapter 7 case?

A:  My fees start at $1,094.00 for a basic chapter 7 case, which includes the $299.00 court filing fee and my attorney fees.  However, my fees may be more or less depending upon the number of creditors, if the matter requires an expedited filing, if any additional work is anticipated, etc.  If you qualify for the court's fee waiver, and the court waives the chapter 7 filing fee, I waive my fees as well.

I provide my fee estimate for each case at the end of the Consultation appointment and give each prospective client a copy of the fee estimate. 

The services I typically perform in a basic chapter 7 case include:

• Preliminary bankruptcy counseling.
• Acquisition of  the Client’s credit report.
• Verification of the Client’s eligibility for chapter 7 relief prior to filing the case.
• Preparation and filing of the bankruptcy petition and schedules with the Court.
• Delivery of  the documents required for §341 Meeting to the assigned trustee.
• Representation at the initial §341 Meeting of Creditors.
• Review of reaffirmation agreements.

Representation which exceeds the above-mentioned services such as lien avoidance actions or redemption actions would first have to be contracted for by both parties in writing and would subject Client to additional fees.

Q:   Are the court filing fees waived in certain circumstances?

A:  Yes.  The Court will waive the court filing fees if the debtor qualifies.  To qualify a debtor's household income must fall below the applicable poverty guidelines.  See the 2008 Poverty Guidelines.

Debtors who qualify must file a completed B3B Application for Waiver of Chapter 7 Filing Fee with the Bankruptcy Court simultaneously with their chapter 7 bankruptcy petition.  For more information, see Instructions for B3B Application for Waiver of Chapter 7 Filing Fee.

The Court also allows debtors in limited circumstances to pay the filing fee in installments.  Click these links for more information regarding the B3A Application and Order to Pay Filing Fee in Installments and Instructions.

Q:  Are the attorney fees in chapter 13 cases set by the court? Also, how are the attorney fees structured?

A:  Please allow me to clarify the typical structure of chapter 13 fees since most attorneys fail to fully explain the fee structure.

The retainer agreement must clearly set forth the proposed fee structure. Read and understand your retainer agreement. Attorneys who fail to fully disclose the proposed fee structure should be reported to the State Bar of Nevada.

Nevada is a "no-look" jurisdiction, which means that the court recognizes a basic chapter 13 case will require sixteen (16) hours of legal services.  Thus, the court in the interest of time and effort approves fees based on up to sixteen (16) hours of work.  The total fees will depend on a particular attorney's hourly rate.  The standard hourly rate in the Las Vegas area is $250.00 per hour.  As such, most attorney fees for a chapter 13 case are $4,000.00, which represents 16 hours of work at the hourly rate of $250.00.

Be aware that some attorneys charge more than the standard hourly rate.  Also, attorneys routinely charge additional chapter 13 fees, which are based upon legal services provided in excess of the basic sixteen (16) hours.  Additional fees, however, must first be approved by the court.  The attorney must file a fee application with the court for fees in excess of the no-look fees.  The attorney must demonstrate that the debtor agreed to pay the attorney for additional work, that the additional work was in fact performed, and that the fees were reasonable. 

Always ask your attorney prior to retaining how much he or she charges both as an hourly rate and also if there is a cap or ceiling on the additional fees he or she may charge.  The chapter 13 plan must state how much the attorney intends to bill for additional fees if additional work is necessary.

Most if not all local attorneys charge the no-look fee and routinely file fee applications for approval of additional fees. To make the chapter 13 fees more affordable for financially distressed clients, most attorneys only charge upfront fees to file the chapter 13 case. Upfront fees are intended to partially cover the cost of the initial chapter 13 filing. The remaining balance of the no-look fee is incorporated into the debtor’s chapter 13 plan. The trustee pays the unpaid attorney fees from the debtor’s plan payments.

Additional attorney fees may result in a higher chapter 13 plan payment. Debtors should carefully review the chapter 13 plan for hidden fees and demand an explanation of the plan if necessary.

Attorney fees are treated as unsecured debt, but are paid before other unsecured creditors. Therefore, if a debtor must pay unsecured creditors at least $4,000.00, then the remaining no-look fees of $3,000.00 (since the debtor paid upfront fees of $1,000.00) would be paid out of the unsecured pool. The remaining unsecured creditors would only receive a pro-rata share of $1,000.00.

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