Filing fee reimbursement not allowed in Chapter 13 plan
Florida consumers who file for Chapter 7 bankruptcy may have their filing fee waived under some circumstances. However, there is no such waiver in a Chapter 13 bankruptcy. In some cases, debtors may pay their filing fee in installments. One debtor had her filing fee paid by her lawyer, who advanced her $310 with the expectation that it would be repaid.
The lawyer asked the court to have the money repaid as an administrative priority claim. If approved, this would allow him to get paid ahead of general unsecured creditors. The justification for the request was that the money was used to preserve the bankruptcy estate in addition to the fee being actual and necessary. However, the court ruled that the payment was a benefit to the debtor directly as opposed to her estate.
Furthermore, the court found that the filing fee was essentially the cost of admission for seeking debt relief through bankruptcy. If a lawyer was allowed to seek reimbursement for this fee, it could be detrimental to creditors. According to the debtor’s proposed plan, she would make 60 payments of $750 while paying unsecured creditors $1,000. She had in excess of $80,000 in unsecured claims at the time of the filing.
Debtors who are seeking debt relief may wish to file for Chapter 13 bankruptcy. It may allow an individual to create a repayment plan that lasts for up to 60 months. During the repayment period, creditors generally cannot take actions such as foreclosing on a house or repossessing a vehicle. However, this may not be true if plan payments are not made as agreed.