Contrary to many popular misconceptions about bankruptcy, declaring bankruptcy does not necessarily mean that a person is “broke.” It means that, even if the person has cash or other assets on hand, they cannot continue to make payments on their debts and other obligations with their available income and assets. Sometimes, though, a person is in such financial distress that they must ask the bankruptcy court to waive the filing fee and other court costs. This is known as a request to proceed in forma pauperis. A California district court recently considered such a request from a Chapter 7 debtor. Following the magistrate’s finding that the debtor did not make the request in good faith, the judge denied it. In re Gjerde, No. 2:15-mc-0013, findings and recommendations (E.D. Cal., Oct. 26, 2015), order (Nov. 13, 2015).
As with any legal proceeding, bankruptcy courts require a payment of fees for new cases. In the Central District of California, which includes Los Angeles, the filing fee for a Chapter 7 bankruptcy petition is $335, and $310 for a Chapter 13 petition. Most other new bankruptcy filings have a much higher fee of $1,717. Reopening a case also requires the payment of a fee—$260 for a Chapter 7 case and $235 for Chapter 13. The court charges fees to amend bankruptcy schedules, to file certain motions, and to issue certain documents like abstracts of judgment. Converting a Chapter 7 case to Chapter 13 is free of charge, but a conversion in the opposite direction costs $25.
Numerous federal statutes and rules address in forma pauperis requests for a wide range of fees, including the cost of obtaining a transcript, 28 U.S.C. § 753(f), and most or all fees associated with an appeal. Fed. R. App. P. 24. U.S. district courts have discretion to permit a waiver of fees if the requesting party submits an affidavit stating that they are unable to pay, or provide security for, the required fees. The court may not grant the request if it “certifies in writing that [the request] is not taken in good faith.” 28 U.S.C. § 1915(a)(3). While the same general standards as in other federal proceedings govern in forma pauperis requests in Chapter 13 cases, additional requirements apply to Chapter 7 cases. See Guide to Judiciary Policy, Vol. 4, § 820 et seq.