What If I Cannot Pay the Filing Fee for my Bankruptcy?

The current bankruptcy filing fee to file a Chapter 7 bankruptcy case is $335.00.  This fee may be a little out of reach for some individuals who are in financial distress and have to decide whether to use their money to pay their electricity bill or their phone bill.

So what can these people do if they need to file for bankruptcy to get debt relief? There is some good news.

Bankruptcy Filing Fee Waiver

If you file a Chapter 7 bankruptcy case you may be eligible for a fee waiver if your gross household income falls under 150% of the poverty guidelines for the number of people in your household. Currently, if you live within the 48 contiguous states, the 150% poverty levels are:

• $1,471.25 for a household of 1
• $1,991.25 for a household of 2
• $2,511.25 for a household of 3
• See the Poverty Guidelines for additional family sizes.

Bankruptcy filing fee waivers are granted or denied based on the discretion of the Judge in your bankruptcy case.  The bankruptcy Judge looks at the totality of circumstances to determine whether or not to grant the fee waiver. The bankruptcy Judge basically looks at your entire financial situation to see if you can afford to pay the filing fee or not.

If the bankruptcy Judge denies your application for a filing fee waiver, the Judge has two options:

1. Make the entire filing fee of $335.00 payable immediately (normally 5 to 10 days from the denial of your fee waiver) or
2. Allow you to pay the bankruptcy filing fee in installments.

These two options are also based on the discretion of the bankruptcy Judge.  In most cases, I have seen the bankruptcy Judge allows people to pay the filing fee in three to four installments. Please note this does not guarantee the same result for you.  As previously indicated the Judge has the discretion to choose any of the two options for you depending on your financial situation.

Filing Fee Waivers for Chapter 7 Bankruptcy

Bankruptcy filing fee waivers are available in Chapter 7 bankruptcy cases, but not Chapter 13 bankruptcy cases as Chapter 13 bankruptcy cases are normally filed by people that have a steady income. Chapter 13 filers should be able to make monthly payments to a Chapter 13 trustee to pay a portion of their debts back in a chapter 13 plan of reorganization.  However, on a good note, as of December 1, 2015, you have the option of paying your Chapter 13 filing fee of $310.00 in installments and therefore you send the Chapter 13 Trustee your regular monthly payment and he will pay the clerk of Bankruptcy court the filing fees for you over three to four months.

If you have questions regarding any aspect of Bankruptcy in Alabama, Tennessee or Mississippi, please call one of our Bond & Botes affiliated offices. We offer free initial consultations that can help analyze your situation and help you make the best decision in regards to your financial problems.