Chapter 11 Bankruptcy Fees

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On average, chapter 11 bankruptcy is easily the most expensive form of bankruptcy to attempt a filing for. This type of bankruptcy is usually the most complex as well, as it usually includes businesses and individuals with investments in small businesses, and requires thorough work on the lawyer’s part (filers are almost forced by the court to enter the chapter 11 filing system with the help of a lawyer because of the difficulty of the chapter 11 process). So what are the bankruptcy fees you can expect to pay throughout the Chapter 11 bankruptcy process.

Bankruptcy Fees

After all is said and done, the reasons that chapter 11 is the most expensive to file is because of the number of people involved.

  • The filing fee alone for chapter 11 bankruptcy is anywhere from $800 to $1,200.
  • Even if the debtor hires a lawyer at rock bottom pricing, and not one creditor on the list contests any part of the bankruptcy plan,  after the lawyer is hired and the filing fees for all of the relevant paperwork and court costs are added up, a simple cut and dry chapter 11 bankruptcy can still easily cost the filing debtor over $20,000.

This clearly indicates that the court fees alone don’t correctly reflect the true cost of a chapter 11 bankruptcy. Even with the court fees being basically constant, there are so many variables with this type of bankruptcy that, often times the costs are escalated to the point that costs can skyrocket. In fact, in some instances, after the repayment and reorganization plan fees have been assessed and all the legal costs added up, the base cost of the court process has reached over $100,000.

Reorganization and Debt Repayment Plans 

One reason that filing for chapter 11 bankruptcy can grow to be as expensive as it can is because of the fact that this type of bankruptcy involves a reorganization plan, which is designed to show evidence to all of the creditors involved that the business or individual they’ve lent money to will be able to become profitable within a short time after the bankruptcy filing. These reorganization plans are difficult to design depending on the business they deal with, and cost a healthy amount of money due to the number of people involved.  

In addition to the reorganization plan, there also must be a debt repayment plan. The debt repayment plan is costly as well, because the fact that the court designates a monthly payment plan based on the amount of debt the debtor holds at the time of bankruptcy. The creditors may also choose to dispute the terms of the repayment plan, causing delays in the court process. This can greatly increase the amount of money spent in court costs as well.  

Getting Legal Help

If you are facing a chapter 11 bankruptcy, you need to call a lawyer. Your attorney can explain to you the bankruptcy fees you are likely to face and can help you to navigate though the complex chapter 11 process.