What Are The Costs I Should Expect For A Chapter 11 Bankruptcy?
When you are planning to file for Chapter 11 bankruptcy, you may know that this type of bankruptcy tends to cost significantly more than other types of reorganization bankruptcy, and more than Chapter 7 liquidation bankruptcies. For many businesses that want to file for reorganization bankruptcy, Chapter 11 is the only option, so it is necessary to pay the fees and costs associated with a Chapter 11 case. At the same time, it is important to understand what those fees and costs entail, and what you should expect in your Chapter 11 case. The key thing to know about the costs for a Chapter 11 case is that, while filing fees are uniform, attorneys’ fees and related costs depend upon the specific facts of the case, and they can range widely. Our experienced West Palm Beach Chapter 11 bankruptcy lawyers can provide you with more information.
Filing Fees in a Chapter 11 Bankruptcy Case
The first fees, which are standard in a Chapter 11 bankruptcy case, are the filing fee and the miscellaneous administrative fee. These fees are charged in every Chapter 11 bankruptcy case, and they do not vary based on the circumstances. These fees include the following:
- $1,167 case filing fee; and
- $571 miscellaneous administrative fee.
In total, the fees to file for Chapter 11 bankruptcy are $1,738. This amount must be paid to the clerk of court when the debtor files for Chapter 11 bankruptcy. In some circumstances, by permission of the court, the debtor may be able to pay in installments. However, these are not the only costs associated with a Chapter 11 bankruptcy case. Over the course of the bankruptcy case, you will also need to consider quarterly fees that are paid to the United States Trustee’s Office. Given that Chapter 11 bankruptcy cases are extremely complex, it is usually necessary to have a bankruptcy attorney, and you will thus need to consider attorneys’ fees. In addition, in some cases, businesses that are filing for Chapter 11 bankruptcy will need to consider working with a financial advisor, and thus will need to pay those costs, as well.
Costs to Expect in Attorneys’ Fees and Advisor Fees
In addition to the initial filing fee, you will need to consider these additional costs:
- Quarterly filing fees to the United States Trustee’s Office;
- Attorneys’ fees, which Bloomberg suggests usually amount to about 1 percent to 2 percent of a business’s assets for larger businesses, and up to about 5 percent of a business’s assets for smaller businesses;
- Financial advisor fees if a financial advisor is essential to the reorganization.
Options to Reduce the Cost of a Business Reorganization Bankruptcy
Given that Chapter 11 bankruptcy cases can cost a significant amount of money, you may be wondering if you have any options to reduce those costs. In short, you could be eligible for a different type of reorganization bankruptcy that could cost you less money. Options may include Chapter 13 bankruptcy if you own a sole proprietorship, Chapter 12 bankruptcy if your business is made up of “family fishermen” or “family farmers,” or Subchapter V of Chapter 11 for small businesses.
Contact a Chapter 11 Bankruptcy Attorney in West Palm Beach
If you have questions about fees or options for a business bankruptcy, you should get in touch with our Chapter 11 bankruptcy attorneys in West Palm Beach. The advocates at Kelley Kaplan & Eller can speak with you today.
Sources:
uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics
bloomberglaw.com/login?target=https%3A%2F%2Fwww.bloomberglaw.com%2Fstart
uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-12-bankruptcy-basics#:~:text=Chapter%2012%20is%20designed%20for,or%20part%20of%20their%20debts
