In 2021, for the average person or couple filing a Chapter 7 bankruptcy in Omaha, Nebraska is around $1,750. On the lower end, the total cost may only be around $1,500 while a more involved case might be closer to $2,000 or perhaps a bit more. These amounts only apply to relatively simple consumer cases and they do not apply to bankruptcies related to businesses.
It is important to know the breakdown of the total cost to file bankruptcy because different lawyers include different services and fees in their quotes. When an individual has a full understanding of what is involved, he can truly compare apples to apples.
Let’s look at an example of the cost to file bankruptcy in Omaha for a simple and uncomplicated case.
Bankruptcy Background
- Jane Doe lives in Omaha, Nebraska.
- Jane is recently divorced.
- She has two kids, ages 3 and 7.
- Jane works full-time as a dental assistant and earns a salary of $45,00 per year.
- She also is supposed to receive child support in the amount of $850 per month, but her ex-husband is self-employed and is very spotty at paying her because of a struggling business.
- In the divorce decree, John Doe (her ex-husband) was ordered to pay the joint credit card debts that total $27,000. However, because John’s business is not making a profit, he has been unable to pay these creditors.
- Since Jane is also listed as an owner of the credit cards, she is getting sued and garnished. Jane just received a garnishment on her wages. The creditor will be taking 25% of her take-home pay next week!
Consultation With Bankruptcy Attorney
Jane sets an appointment to have a free bankruptcy consultation with one of the bankruptcy lawyers at John T. Turco & Associates, P.C., L.L.O. At the appointment, Jane lets the attorney know about the background information. The attorney asks a lot of other questions too:
- Are you being sued by any other creditors other than the one we know about?
- Do you own a house?
- Do you have a car loan?
- Do you have any tax problems?
- What about assets? What do you own?
The bankruptcy attorney determines that Jane’s case is really pretty basic other than a few little things. Obviously, the wage garnishment will need to be immediately stopped once the bankruptcy is filed. Another big advantage that Jane has going for her in terms of getting an affordable bankruptcy quote is that she is very organized. She has all of her pay stubs going back six months, her bills are all in one folder and she also has her tax returns for the last two years with her. Jane is prepared and knows who she owes.
Bankruptcy Cost Estimate
Based on all of this above information, the lawyer quotes Jane $1,700 for everything related to her Chapter 7 bankruptcy filing. But what is everything?
Here is a breakdown for illustration purposes only:
$338 Bankruptcy court filing fee (required by federal law)
$15 Pre-bankruptcy credit counseling course (required by federal law)
$37 Credit report (not legally required but it is crazy not to get one)
$1310 Bankruptcy attorney fees
$1,700 = Total Cost for Chapter 7 Bankruptcy
As is shown above in this hypothetical example, the attorney fees involved in filing bankruptcy are only $1,310. But, the actual cost to file bankruptcy in Omaha, Nebraska is $1,700. That is a difference of $390 and each bankruptcy law firm does it differently.
Here are some of the discrepancies to watch out for:
- Some bankruptcy lawyers do not include the pre-bankruptcy course required by federal law.
- Other attorneys may not require nor pay for a credit report.
- Some bankruptcy attorneys may only quote you for the attorney fees alone and all the costs are on you.
So, the ultimate answer to the question of how much does it cost to file bankruptcy is only truly known by adding up all of the components required by law and common sense.
March 2021 Update & Warning
Beware of attorneys that have recently begun a new fee scheme for Chapter 7 bankruptcy cases where they state that upfront Chapter 7 bankruptcy costs only $75.00 to just a few hundred dollars.
The key to that working is the usage of upfront costs. The marketing scheme involves breaking the cost of Chapter 7 bankruptcy services into “pre-bankruptcy filing” work and “post-bankruptcy filing” legal work.
In this fantasy world, the attorney suggests to you and the court that very few legal fees were incurred pre-bankruptcy. The truth is most of the work is done pre-filing. Then, a moment after an electronic filing is made, the attorney requests that you sign a second contract for post-filing bankruptcy work.
Watch out! Wait until you see how much that costs! Expect to pay at least $2,400 or more!
Don’t fall for this trick. It’s unethical, dishonest, and it will cost you more in the end. Additionally, the legality of such a practice is currently being investigated by the United States Department of Justice.
Of course, we have only been talking about what it costs to file bankruptcy in Omaha and have not addressed many of the more important and critical issues about the quality of service that is absolutely necessary. See the previous blog on finding A Cheap Bankruptcy Lawyer in Omaha, Nebraska for a more detailed discussion of what is all involved.
