In 2005, the Bankruptcy Code was amended. One of the changes provided for in the amendments was to allow debtors who are truly needy to apply for waiver of the court filing fee for Chapter 7 bankruptcy cases. The court filing fee in Chapter 7 cases is currently $306.00. The ability to acquire waiver of the court filing fee requires that the debtor meet four requirements. These requirements are:
- Debtor must be an individual. The waiver is not available to businesses.
- Debtor must show that they cannot afford to pay the filing fee in installments over 120 days.
- Waiver is limited to Chapter 7 bankruptcy cases only. Chapter 13 debtors must pay the filing fee.
- Debtor must have a household income that is less than 150% of the poverty line.
Whether or not to grant a fee waiver is at the bankruptcy judge’s discretion, except that the judge cannot grant waiver for debtors with income above 150% of the poverty line. The official poverty guidelines are available from the U.S. Department of Health and Human Services.
The application for fee waiver requires that the debtor disclose their current income, whether they anticipate their income will change in the near future, and what assets are available to them. Fee waivers will generally not be granted if the debtor has access to funds, even though exempt, which can be used to pay the filing fee. In addition, the court also takes into consideration whether the debtor was able to pay their attorney’s fees. Judges are unlikely to grant a fee waiver excepting a debtor from paying the court filing fee when the debtor was able to pay their attorney.