James H MaGee
Washington Bankruptcy Attorney
Chapter 7, Chapter 11, & Chapter 13 Bankruptcy
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy is the most common form of filing, often called a "straight bankruptcy". With many technical exceptions beyond those listed here, all Debts are discharged in Chapter 7 Bankruptcy EXCEPT the following:- Child Support
- Student Loans
- Most Traffic Tickets and Criminal Fines
- Most Taxes
- Injuries Caused by Drunk Drivers
Chapter 7 Bankruptcy cases can potentially discharge debts for:
- Medical Bills
- Lawsuits for injuries caused while driving uninsured
- Credit Card Debts
- Debts following evictions and/or repossessions
- Lawsuits for breach of contract
- Small or moderate NSF checks
- Garnishments
- Most business debts
- Some fraud debts
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy involves making payments over time to creditors. The
payment plans can be as short as a few months, or as
long as five years. Some people have problems that
cannot be taken care of with a Chapter 7 Bankruptcy, and are
better off filing a Chapter 13 Bankruptcy plan.
The following debts and problems
can often be handled more advantageously in a Chapter
13 Bankruptcy:
- Taxes
- Fraud
- Embezzlement
- Moderate to large NSF Checks
- Child Support
- Criminal and Traffic Ticket Fines
- Reinstating a suspended driver's license
- House payments that are several months behind
- Car payments that are several months behind
- Injuries caused by your intentional conduct (such as assaulting someone
- Unpaid alimony or spousal maintenance
- Reducing a car payment to an affordable level
- Reducing a furniture or household payment to an affordable level
Chapter 11 Bankruptcy
Chapter 11 Bankruptcy cases are increasing in rarity. They are usually for large corporations or businesses, or individuals with many large debts as well as lots of equity in their assets. If you have a secured debt of over $1,010,650 and unsecured debt of over $336,900, you may have to file a Chapter 11 Bankruptcy instead of a Chapter 13 Bankruptcy, unless you are willing to file a Chapter 7 Bankruptcy. The decision to file a Chapter 11 Bankruptcy is indeed a technical decision. Chapter 11 Bankruptcy cases are very expensive and infrequently recommended. Most attorneys will not even tackle Chapter 11 Bankruptcy cases. Chapter 11 Bankruptcy cases are reserved for the most aggressive and hardworking attorneys. Our office is willing to put forth the effort necessary to serve your Chapter 11 needs, if we determine that a Chapter 11 Bankruptcy filing is the best plan for your situation.Costs to File Bankruptcy
Chapter 7 Bankruptcy: Cases for our lowest income and senior clients may cost as little as $650. Responsible and professional legal representation can be had for as little as $1,250. Most wage earners pay $1,500, and those wage earners with higher incomes will generally pay between $1,750 and $2,250. Business owners in Chapter 7 Bankruptcy generally pay at least $2,000. This fee can be higher depending upon the anticipated complexity of the case. Rarely does any business owner case exceed $6,000. Generally, in most basic routine cases, we will start work on your case with the payment of $200. The remaining balance of the attorneys’ fee is due at your convenience, whenever you are ready to have us send your papers to the United States Federal Bankruptcy Court.Bankruptcy is an excellent investment. There exists no better long term investment than ridding your family of “negative equity” and expensive creditor payments. You will be happier, healthier and less stressed out after your bankruptcy case, because once again you will have hope for the future. We also help you arrange with the courts for a four month postponement of the payment of the $299.00 Chapter 7 Bankruptcy court filing fee and the $274.00 court filing fee.
Chapter 13 Bankruptcy: Really, all attorneys pretty much charge the same price for Chapter 13 Bankruptcy. The court’s “official” minimum fee charged by attorneys is $3,500. Most attorneys allow you to pay a $200-$400 nonrefundable down payment and then an additional $400-$800 when you sign your documents, depending upon the complexity of your case. Then, with most all attorneys, balance of the fees (e.g., the remaining $2,700-$2,900) is taken in small monthly installments after your plan is filed, and is paid to the attorney from the bankruptcy court trustee, and not out of your pocket. Thus, to be absolutely clear, you usually never pay more than $600-$800 up-front out of your personal pocket to the attorney in most Chapter 13 Bankruptcy cases. There are some exceptions to our “$600 up front” rule here at our office. If your case if related to the operation or failure of your business, OR you are coming in to receive our services in the final three weeks before a foreclosure sale on your home or other property, OR you have exceptionally high income and taxes, you have what we call a “high maintenance” difficult case. We may ask that you pay more than $600 of your fees up front for such difficult and/or time pressured “high maintenance” cases. Failed business and last minute foreclosure cases are examples of the most common “high maintenance” type cases. We believe that charging more up front for a “high maintenance” case is fair. Think about it like a shipping cost to send a package: Last-minute priority and overnight delivery mail like Federal Express and DHL always costs more than a normal mail package. Also, shipping a large, complex, odd-shaped or fragile object by special delivery or special freight always costs more than a plain package that is not insured against breakage. For those difficult and/or last minute cases, the up front fee thus may increase slightly according to the risk and complexity of delivering the work product. With all attorneys, in complex Chapter 13 Bankruptcy cases, there can be extra fees above $3,500 (but remember, you generally never pay more than $600 out of pocket to the attorney). Again, any extra fees above $3,500 are added into the “bankruptcy plan” and are disbursed to the attorney by the bankruptcy court trustee, such that you really don’t end up paying any extra money directly out of pocket. What usually happens is that payments made through the plan to credit cards and medical bills and other debts are reduced so that the attorney services of your attorney can be paid. Rarely does the total fee in a Chapter 13 Bankruptcy case exceed $3,500, and very little of this is paid out of pocket by you. We find that few, if any, reputable attorneys in our business service area differ much from our Chapter 13 Bankruptcy fee policy.
Chapter 11 Bankruptcy: Call for pricing. We are extremely competitive.
Bankruptcy is a prudent step towards rebuilding your financial future.
As an example, paying $1,500 in bankruptcy fees to be rid of $40,000 in credit card and medical bill debt is an immediate 2,667% “return on investment” really increasing your net worth by $40,000, because you erase this negative hit off of your balance sheet. No stock market, real estate or bond investment will ever provide an immediate 2,667% positive return on your investment. Bankruptcy is the US Government’s gift to you and your family that keeps on giving as you go on to build stability, comfort and happiness for you and those who depend upon you.Would you accept a gift of $19,860.75 cash into your bank account from the U.S. Government? Why of course you would accept a $19,860.75 perfectly legal cash gift! Bankruptcy is just such a gift. By illustration, if you are struggling under total $500 monthly credit card and medical bill payments but then file for bankruptcy under the laws of the United States of America, you could thereafter begin to contribute that $500 monthly amount into your 401k, savings account or other investments. Bankruptcy would enable you to start saving $500 monthly (over $6,000 per year) towards retirement or other goals. With the addition of a very conservative compounding interest rate of just five percent (5.0%) per year you would have over $19,860.75 “cash in hand” after just three short years. We encourage you to accept the US Government’s $19,860.75 personal gift to you.