In order to file a Ch7 bankruptcy, a Debtor is required to pay a $335 filing fee. Obviously this is sometimes hard for Debtor as that is the reason why they are filing for bankruptcy. The law allows a Debtor to request a fee waiver.
The Court does allow one to file a fee waiver request under 11 USC 1930(f)(1). The Court uses the following standard:
- The Debtor’s income is less than 150% of the income poverty line for the family size involved, and
- The Debtor is unable to pay the filing fee in installments, or
- Various other factors.
Family Size 150%
Courts have a lot of discretion in what factors they rely upon to grant or deny a Debtor’s request for a fee waiver. The burden is on the Debtor, but here is what the Court considers:
The Income Test
This tests looks at your income and your family size as it compares to 150% of the applicable poverty level. The arguable issue is what defines family size nor is income defined.
The Totality of the Circumstances Test
The Court will look at the following 7 elements:
- Discrepancies between the waiver application and bankruptcy schedules and/or testimony
- Collateral sources of income from family or friends
- Excessive or unreasonable expenses that could be used to pay the filing fee
- Whether any portion of attorney’s’ fees will e paid after the case is filed.
- Whether the debtor has property that could be used to pay the filing fee
- The Debtor’s historical spending of disposable income
- Whether the Debtor’s current or anticipated income or expense are the result of temporary or extraordinary circumstances.
Ultimately, fee waivers are granted for those that really need it. Worst case scenario if a fee waiver is not granted, the Court will allow you to pay the filing fee in two installments.