If you’re considering filing bankruptcy in Delaware, you’ll need to understand the types, costs, as well as some helpful advice to finding good attorneys.

Am I Qualified for Bankruptcy?

Qualifying for bankruptcy in Delaware, like in any other state in the United States, involves meeting certain eligibility criteria and navigating a complex legal process. Bankruptcy is a legal option designed to provide financial relief to individuals and businesses who are overwhelmed by debt and unable to repay their creditors. In Delaware, individuals and businesses can file for bankruptcy under different chapters of the Bankruptcy Code, including Chapter 7, Chapter 13, and Chapter 11. Each chapter has its own set of qualifications and procedures, so let’s explore who may qualify for bankruptcy in Delaware.

1. Chapter 7 Bankruptcy: Chapter 7 bankruptcy, also known as liquidation bankruptcy, is designed for individuals and businesses who are unable to repay their debts and want to discharge most of their unsecured debts, such as credit card debt and medical bills. To qualify for Chapter 7 bankruptcy in Delaware, you must meet the following criteria:
   • Means Test: The means test is a key eligibility requirement for Chapter 7 bankruptcy. It assesses your income and expenses to determine if you have enough disposable income to repay your debts. If your income is below the median income for Delaware or if you pass the means test after deducting allowed expenses, you may be eligible for Chapter 7.
   • Credit Counseling: Before filing for bankruptcy, you must complete credit counseling from an approved agency. This requirement aims to ensure you explore other alternatives to bankruptcy.
   • No Recent Bankruptcy Discharge: If you previously received a Chapter 7 discharge within the past 8 years, you may not be eligible for another Chapter 7 discharge. However, you might still be eligible for Chapter 13 bankruptcy.
2. Chapter 13 Bankruptcy: Chapter 13 bankruptcy, also known as a wage earner’s plan, is for individuals with a regular income who want to reorganize their debts and develop a repayment plan over 3 to 5 years. To qualify for Chapter 13 bankruptcy in Delaware:
   • Regular Income: You must have a steady source of income to make monthly payments under the proposed repayment plan.
   • Debt Limits: There are debt limits for Chapter 13.
   • Credit Counseling: Similar to Chapter 7, you must complete credit counseling before filing for Chapter 13 bankruptcy.
3. Chapter 11 Bankruptcy: Chapter 11 bankruptcy is primarily designed for businesses, including corporations, partnerships, and sole proprietorships. Individuals can also file for Chapter 11 if they do not qualify for Chapter 7 or Chapter 13, but it is a more complex and expensive process often used for larger debts and businesses.
   • No Debt Limits: Unlike Chapter 7 and Chapter 13, there are no specific debt limits for Chapter 11 bankruptcy.
   • Business or Individual Debtors: Chapter 11 can be used by both businesses and individuals, but it is typically associated with businesses seeking to reorganize their debts and continue operating.

Furthermore, bankruptcy should be considered as a last resort after exploring other debt relief options, such as debt consolidation or negotiation with creditors. Bankruptcy can have long-term consequences on your credit and financial future, so it’s essential to weigh the pros and cons carefully and seek legal advice to make an informed decision.

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Do You Need a Lawyer to File For Bankruptcy in Delaware?

While it is not legally required to hire a lawyer to file for bankruptcy in Delaware, it is highly advisable to do so. Filing for bankruptcy is a complex and nuanced legal process with potential long-term consequences for your financial future. An experienced bankruptcy attorney can provide valuable guidance and ensure that your interests are protected throughout the process. Here are several reasons why it’s a good idea to have legal representation when filing for bankruptcy in Delaware:

1. Navigating Complex Laws and Procedures: Bankruptcy law is intricate and subject to frequent changes. An attorney who specializes in bankruptcy law will have in-depth knowledge of the relevant federal and state laws, as well as the specific procedures followed in Delaware’s bankruptcy courts. They can help you understand your options and guide you through the process efficiently.
2. Maximizing Exemptions: Delaware has its own set of bankruptcy exemptions that determine what property you can keep when you file for bankruptcy. These exemptions may differ from federal exemptions. An attorney can help you take full advantage of the exemptions available to you, protecting more of your assets from liquidation.
3. Chapter Selection: Choosing the right chapter of bankruptcy (Chapter 7, 13, or 11) is crucial and depends on your unique financial situation and goals. A bankruptcy attorney can evaluate your circumstances and recommend the most suitable chapter for your case.
4. Filing Requirements: Bankruptcy petitions and related documents must be filed accurately and on time. An attorney can ensure that all necessary paperwork is completed correctly and submitted within the court’s deadlines, reducing the risk of dismissal or complications in your case.
5. Dealing with Creditors: Once you file for bankruptcy, creditors are legally prohibited from engaging in debt collection activities. Your attorney can communicate with creditors on your behalf, providing a buffer between you and aggressive collection efforts.
6. Protection from Errors and Omissions: Mistakes or omissions in your bankruptcy filing can lead to delays, denials, or even legal consequences. An attorney’s expertise minimizes the likelihood of such errors and helps you avoid potential legal troubles.
7. Court Representation: If issues or disputes arise during the bankruptcy process, having an attorney can be invaluable. Your attorney can represent your interests in court, negotiate with creditors, and advocate for favorable resolutions.
8. Avoiding Potential Pitfalls: Bankruptcy can have long-term effects on your credit and financial future. An experienced attorney can provide guidance on how to make the most of your fresh financial start, helping you avoid common pitfalls that could hinder your recovery.
9. Counsel on Alternatives: Bankruptcy may not be the best solution for everyone. A bankruptcy attorney can evaluate your financial situation and discuss alternative debt relief options, such as debt consolidation or negotiation with creditors, to determine if there are better paths to financial stability.
10. Peace of Mind: Facing financial difficulties and the prospect of bankruptcy can be incredibly stressful. Having a knowledgeable attorney by your side can provide peace of mind and reduce anxiety, knowing that you have a professional advocating for your rights and interests.

While hiring an attorney comes with associated costs, the potential benefits, including protecting your assets, navigating the legal complexities, and ensuring a smoother bankruptcy process, often outweigh the expenses. Moreover, many bankruptcy attorneys offer initial consultations to discuss your case, and some may offer flexible payment arrangements to make their services more accessible.

Cost to File Chapter 7 Bankruptcy in Delaware

The cost to file Chapter 7 bankruptcy in Delaware consists of several fees, including filing fees, administrative fees, and potentially attorney fees if you choose to hire an attorney to represent you. Here’s a breakdown of these costs:

1. Filing Fee: The filing fee for Chapter 7 bankruptcy in Delaware is $375. This fee is set by the federal government and applies uniformly across the United States. It’s essential to note that filing fees can change over time due to adjustments for inflation or other factors, so it’s advisable to check the current fee with the Delaware bankruptcy court or an attorney.
2. Administrative Fees: In addition to the filing fee, there may be administrative fees associated with your bankruptcy case. These fees are relatively minor and typically include charges for services such as obtaining a credit counseling certificate, a debtor education certificate, or a fee for reopening a case if necessary. The total amount for administrative fees is generally relatively low, often under $70.
3. Attorney Fees: While not a required cost, many individuals choose to hire a bankruptcy attorney to guide them through the Chapter 7 bankruptcy process. Attorney fees can vary significantly depending on your location, the complexity of your case, and the attorney’s experience. In Delaware, attorney fees for a Chapter 7 bankruptcy case may range from a few hundred to a few thousand dollars. It’s essential to discuss fees with potential attorneys during initial consultations and clarify the scope of services covered by their fees.
4. Credit Counseling and Debtor Education: Before filing for Chapter 7 bankruptcy, you are required to complete credit counseling and debtor education courses from approved agencies. These courses typically have associated fees, which can vary depending on the provider you choose. Fees for these courses may range from $25 to $60 each, although some agencies offer fee waivers or reduced fees based on your income.
5. Miscellaneous Costs: There may be other miscellaneous costs associated with your Chapter 7 bankruptcy, such as notary fees, postage, or costs related to obtaining copies of your credit report.

Keep in mind that while bankruptcy can provide a fresh start by discharging many of your unsecured debts, it’s a significant financial decision with long-term implications. Before proceeding with a Chapter 7 bankruptcy filing in Delaware, it’s advisable to consult with a qualified bankruptcy attorney to assess your eligibility, explore alternatives, and ensure that you fully understand the costs and potential consequences associated with bankruptcy. An attorney can also help you navigate the process efficiently and maximize the benefits of bankruptcy relief.

Cost to File Chapter 11 Bankruptcy in Delaware

The cost to file Chapter 11 bankruptcy in Delaware can be significantly higher than other bankruptcy chapters due to its complexity and the unique circumstances often involved in business reorganizations. Chapter 11 is primarily designed for businesses, including corporations, partnerships, and individuals with substantial debt who need to restructure their financial affairs. Here’s a breakdown of the costs associated with filing for Chapter 11 bankruptcy in Delaware:

1. Filing Fee: The filing fee for a Chapter 11 bankruptcy case in Delaware, is set by the federal government and is the same throughout the United States. However, filing fees can change over time, so it’s essential to verify the current fee with the Delaware bankruptcy court or an attorney.
2. U.S. Trustee Fees: In addition to the filing fee, Chapter 11 debtors are required to pay quarterly fees to the United States Trustee Program. These fees are based on the debtor’s disbursements, and the rates can vary. The U.S. Trustee’s office provides guidelines for calculating these fees, and they can amount to a significant ongoing expense during the bankruptcy process.
3. Attorney Fees: Chapter 11 bankruptcy cases are highly complex and often involve a team of professionals, including bankruptcy attorneys, financial advisors, and accountants. Attorney fees for Chapter 11 cases can be substantial and vary widely depending on the complexity of the case and the level of expertise required. Attorneys may charge hourly rates or flat fees, and the total cost can range from tens of thousands to hundreds of thousands of dollars.
4. Retainer for Professionals: In addition to attorney fees, you may need to retain other professionals to assist with your Chapter 11 case, such as financial advisors or appraisers. The fees for these professionals can also be substantial, depending on the scope of their services.
5. Creditors’ Committee Expenses: In some Chapter 11 cases, a creditors’ committee may be formed to represent the interests of unsecured creditors. Debtors are generally responsible for paying the reasonable expenses of the creditors’ committee, which can include legal and professional fees.
6. Miscellaneous Costs: There may be additional expenses associated with the administration of your Chapter 11 case, such as court filing fees for motions and other documents, costs related to the sale of assets, and expenses incurred during the reorganization process.

If you are considering Chapter 11 bankruptcy in Delaware, it is highly advisable to consult with experienced bankruptcy attorneys who specialize in Chapter 11 cases. They can provide a comprehensive assessment of your situation, help you develop a viable reorganization plan, and navigate the complex legal and financial aspects of the process. Legal counsel can also assist in managing costs and ensuring that your case progresses efficiently and effectively through the bankruptcy court.

Cost to File Chapter 13 Bankruptcy in Delaware

The cost to file Chapter 13 bankruptcy in Delaware includes several fees and expenses. Chapter 13 bankruptcy is a reorganization plan primarily designed for individuals with a regular income who want to repay their debts over a period of 3 to 5 years. Here’s a breakdown of the costs associated with filing for Chapter 13 bankruptcy in Delaware:

1. Filing Fee: The filing fee for Chapter 13 bankruptcy in Delaware is set by the federal government and applies uniformly across the United States. However, filing fees can change over time, so it’s essential to verify the current fee with the Delaware bankruptcy court or an attorney.
2. Attorney Fees: While not required, many individuals choose to hire a bankruptcy attorney to assist them with their Chapter 13 case. Attorney fees for Chapter 13 cases can vary widely based on factors such as the complexity of your case, your location, and the attorney’s experience. Attorney fees typically cover legal representation throughout the bankruptcy process, including the preparation of your repayment plan and representation at the creditors’ meeting and court hearings. Attorney fees for Chapter 13 cases often range from several hundred to a few thousand dollars, depending on your circumstances.
3. Credit Counseling and Debtor Education: Before filing for Chapter 13 bankruptcy, you must complete credit counseling from an approved agency and debtor education courses. These courses typically have associated fees, which can vary depending on the provider you choose. Fees for credit counseling and debtor education courses may range from $26 to $58 each. Some agencies offer fee waivers or reduced fees based on your income.
4. Plan Payment: In Chapter 13 bankruptcy, you’ll be required to make monthly payments to the bankruptcy trustee to fund your repayment plan. The amount of these payments depends on your disposable income and the terms of your plan. The total payments over the duration of your plan will depend on the amount of your debts and your ability to repay them.
5. Bankruptcy Trustee Fees: The bankruptcy trustee overseeing your Chapter 13 case will receive compensation based on a percentage of the funds they distribute to your creditors. These fees are built into your monthly plan payments and are not paid separately by you.
6. Miscellaneous Costs: There may be other miscellaneous costs associated with your Chapter 13 bankruptcy, such as court filing fees for motions and other documents, costs related to obtaining copies of your credit report, and any fees for amending or modifying your repayment plan during the course of your case.

It’s important to note that Chapter 13 bankruptcy offers the opportunity to repay a portion of your debts over time while keeping certain assets, such as your home, which might otherwise be at risk in a Chapter 7 bankruptcy.

If you’re considering Chapter 13 bankruptcy in Delaware, it’s advisable to consult with an experienced bankruptcy attorney who can assess your financial situation, help you develop a feasible repayment plan, and guide you through the complex legal process. Additionally, an attorney can provide valuable insights into managing costs and ensuring your case progresses smoothly through the bankruptcy court.

Reliable Bankruptcy Attorneys in Delaware

Below is a list of reputable bankruptcy attorneys in Delaware. They can help you with both personal and business bankruptcy information.

Cynthia L. Carroll, P. A.
262 Chapman Road Bellevue Building, 262 Chapman Rd #108, Newark, DE 19702, United States

Tiffany Poole Esq
2710 Centerville Rd Ste 101, Wilmington, DE 19808, United States

Delaware Bankruptcy Attorney
1213 N King St Suite 2, Wilmington, DE 19801, United States

James C. Reed, P.A.
19633 Blue Bird Ln #6, Rehoboth Beach, DE 19971, United States

The Law Offices of Doroshow, Pasquale, Krawitz & Bhaya
1454 Pulaski Hwy, Newark, DE 19702, United States

Delaware Zip Codes We Proudly Serve:

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