The number of bankruptcy petitions filed throughout the United States has reached historical highs in recent years. One of the main reasons for the dramatic increase in people filing for bankruptcy is the recession the country is just now beginning to climb out of. If you are one of the millions of people across America who is struggling to keep your head above water financially, bankruptcy might be the answer for you as well. One common sense question that people in Ohio often ask is “How much does it cost to file chapter 13 bankruptcy in Columbus OH?” While there is no set answer that applies to all debtors there are some general guidelines that help explain what fees and costs you may incur when you file a chapter 13 bankruptcy in Columbus OH.
Chapter 13 bankruptcy is often referred to as a “wage-earners” bankruptcy because it is usually used by a debtor with an above-average regular source of income. As part of the process the debtor, along with his or her attorney, must develop a repayment plan that will pay off the majority of the debtor’s debt over an extended period of time. There are three common costs/fees that a debtor may incur when filing a chapter 13 bankruptcy –filing fees, attorney fees, and trustee fees.
As of 2013, the filing fee for a chapter 13 bankruptcy is $281. If a debtor is unable to pay the filing fee at the time the petition is filed the debtor may ask to make payment arrangements for the payment of the fee.
The trustee is the official who will oversee the administration of your bankruptcy case. For chapter 13 bankruptcies the case is usually assigned to a standing trustee, meaning someone who acts as a trustee on a full-time, permanent basis. The trustee will collect your payments each month and distribute them to the various creditors according to the plan. The trustee is entitled to a fee for his or her services. The law caps the trustee’s fee to 10 percent of the total monthly payment made by the debtor each month. Most trustees charge between seven and 10 percent, the fee being taken out each month when you make your plan payment.
Attorneys’ fees will vary; however, there is usually not a huge difference among attorneys who are handling the same type of bankruptcy case. The law says that an attorney’s fee must be “reasonable”. What is reasonable in one area of the country, however, might not be in another. Therefore, each district has established what they consider to be “presumptively reasonable” fees, meaning the court will not evaluate a fee at or below that amount in most cases. Excessive fees will likely result in court scrutiny. In Ohio, the Court has set a fee of $3500.00, plus filing fee of $281.00. Unlike a chapter 7 where the entire attorney fee must typically be paid prior to filing, attorney fees in a chapter 13 bankruptcy in Columbus OH can often be included in the monthly payment plan as long as the court has approved the amount of the fee and the overall plan.