Costs are to be paid to the clerk of the court upon filing

Where the financial situation moves out of control, the debtors seek liquidation under Chapter 7. Chapter 7 can be applied by individuals, partnerships or corporate wherein a bankruptcy petition gets filed with the court.

The bankruptcy court demands that the petitioner has to submit the necessary documents as stated by the local state court and the federal courts along with the prescribed fee. The federal bankruptcy courts charge $245 from the petitioner as the case filing fee, $39 as miscellaneous administrative fee, and $15 as trustee surcharge. Failure on the part of the petitioner to make the fee payment will result in the rejection of the petition by the bankruptcy court. The debtor is liable to pay only one filing fee, administrative fee and trustee surcharge irrespective of whether the application is submitted by joint petitioners.

The Chapter 7 bankruptcy costs are to be paid to the clerk of the court upon filing. Under certain circumstances the court permits the petitioner to file the costs in installments. The maximum number of installments that can be made use of by the debtor is restricted to four. The debtor is expected by the court to make the final installment in no later than 120 days after filing the petition with the federal bankruptcy court. Under very extreme cases the court may permit the debtor an extension of not more than 180 days after the filing of petition for the payment of the last installment.

The only exemption from the payment of the Chapter 7 bankruptcy costs are offered when the court is convinced of the fact that the debtor's income is less than 150 percent of the poverty level as defined in the Bankruptcy Code, and that he is unable to pay the Chapter 7 fees even in installments. Under such a circumstance the court waives the fee payment.

The cost of Chapter 7 bankruptcy also includes the amount payable for the services demanded by the professionals. For example, where a debtor employs a bankruptcy forms kit, it will require you to pay an additional sum of $40 to $160 that depends with the state laws applicable. Some go for the bankruptcy software wherein the basic programs cost you $50, while the professional software require you to pay $1,000 or more. Some debtors seek the services of a lawyer to prepare the case file and represent you in court, the fees of which may vary from $800 to $4000.

Identify the cost involved in the process before initiating the proceedings under Chapter 7.