Bankruptcy Filing Fees to Increase on June 1, 2014

gavelGas, groceries, housing… sometimes it seems everything is getting more expensive, and bankruptcy is no exception. On June 1, 2014, the filing fees for Chapter 7 and Chapter 13 bankruptcy petitions will go up for the first time since 2011.

When a new bankruptcy case is filed, the court charges a filing fee. Currently this fee is $306 for a Chapter 7 bankruptcy and $281 for a Chapter 13 bankruptcy. If you hire a bankruptcy attorney to handle your case, you’ll pay the filing fee to your lawyer. He or she will hold this money in a trust account and pay the court on your behalf when the case is filed.

$29 More to File for Bankruptcy

For cases filed on or after June 1, 2014, the Chapter 7 filing fee will be $335. For Chapter 13 cases, the new filing fee will be $310.

Either way, it’s a $29 increase over the current fees. There’s still time to file at the old prices, so if you’d like to save a few bucks, call 317.454.8188 to set up a consultation at my office in downtown Indianapolis.

Why are Filing Fees Going Up?

It’s ironic, but the bankruptcy courts are under financial pressure. It costs money to run a court, and filing fees are a major source of revenue. The number of cases filed has gone down each year since the most recent peak in 2010, and that means less filing fee income for the courts.

In addition to the drop in filings, budget cuts in the federal judiciary have impacted bankruptcy courts. In a December 2012 memo to the Southern District of Indiana bankruptcy bar, Chief Judge James K. Coachys noted that the court’s budget for the year had been reduced by 13%, with further annual cuts projected through fiscal year 2015. As a result of these cuts and the drop in filing fee revenue, the court has been forced to eliminate staff positions and reduce spending in other areas, such as building maintenance and supplies.

Matt Conrad is an Indianapolis bankruptcy attorney and the founder of Conrad Legal LLC, which helps people in Central Indiana get out of debt with Chapter 7 and Chapter 13.

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