When a person files a Chapter 7 bankruptcy case, the Bankruptcy Court charges a filing fee. Currently, the Chapter 7 filing fee is $338.00. In many cases, debtors who cannot afford to pay the filing fee all at once file an Application to Pay the Filing Fee in Installments. If the Court grants the application, the debtor is allowed additional time to pay the filing fee in installments according to the Court’s Order.

What Happens if the Filing Fee Is Not Paid?

If the filing fee is not paid by the deadline set forth in the Court’s Order, the Bankruptcy Court may issue an “Order to Show Cause Why the Bankruptcy Case Should Not Be Dismissed for Failure to Pay the Filing Fee.”

This is a very serious Court Order.

An Order to Show Cause requires the debtor to appear before the Bankruptcy Judge and explain why the bankruptcy case should not be dismissed for failing to comply with the Court’s Order requiring payment of the filing fee. If the case is dismissed, the debtor could lose the protection of the bankruptcy filing, including the automatic stay, and creditors may resume collection activities.

The Bankruptcy Court will not grant a discharge in a Chapter 7 case until all filing fees have been paid in full.

The Hearing Must Be Attended

If the Court issues an Order to Show Cause regarding unpaid filing fees, both the debtor and the debtor’s attorney must attend the hearing unless the Court specifically excuses attendance.

Today, many Bankruptcy Courts conduct these hearings telephonically or by Zoom video conference, but debtors should carefully review the Order because it will contain the specific hearing instructions, including:

• The date and time of the hearing
• Whether the hearing is in person, by telephone, or by Zoom
• Dial-in numbers or video conference links
• Any deadlines to make payment before the hearing

Failing to attend the hearing can result in immediate dismissal of the bankruptcy case.

Can the Case Be Saved?

In many situations, yes.

If the debtor pays the filing fee before the hearing, the Court will often cancel the hearing or allow the case to continue. Even if the fee cannot be paid in full immediately, appearing at the hearing and explaining the circumstances to the Judge may help avoid dismissal in some cases.

However, debtors should never ignore the Order to Show Cause. Prompt communication with your bankruptcy attorney is extremely important.

How to Pay the Bankruptcy Court Filing Fee

If your bankruptcy case was filed in the Eastern District of Michigan, you have various ways to pay the court. Please review my blog post on , “How to Pay the Filing Fee to the Bankruptcy Court in Detroit,” there are several ways to pay the Chapter 7 filing fee.

Option #1 — Pay Online

The United States Bankruptcy Court for the Eastern District of Michigan allows online payment of filing fees and installment payments through Pay.gov. Payments may generally be made by:

• Debit card
• PayPal
• ACH electronic bank transfer

Debtors should have their bankruptcy case number available when making payment. When entering the case number online, only the numerical portion should be entered, not the judge’s initials.

Click here to:  Make an Online Payment

Option #2 — Pay in Person

Payments may also be made directly at the Bankruptcy Court Clerk’s Office located at 211 West Fort St., Detroit MI 48226

• Cash (exact change only)
• Money order
• Certified check

Personal checks, credit cards, and debit cards are typically not accepted at the clerk’s counter for debtor payments. Also note that the bankruptcy court does not give change.

Important Reminder

The Court Order allowing installment payments is not optional. Debtors must comply with the payment deadlines set by the Bankruptcy Judge. Failure to do so can result in:

• An Order to Show Cause
• A mandatory Court hearing
• Possible dismissal of the bankruptcy case
• Delay or denial of the bankruptcy discharge

If you receive an Order to Show Cause for nonpayment of the filing fee, contact your bankruptcy attorney immediately and make every effort to pay the balance before the hearing date.