Filing a Chapter 7 bankruptcy case provides immediate protection from creditors through the automatic stay. However, filing your bankruptcy petition is only one part of the process. You must also either pay the required bankruptcy filing fee or obtain permission from the Bankruptcy Court to pay it in installments or, in limited circumstances, request a fee waiver.

As of this writing, the Chapter 7 bankruptcy filing fee is $338.00.

If the filing fee is not paid by the deadline set by the Bankruptcy Court, you may receive an Order to Show Cause Why Your Bankruptcy Case Should Not Be Dismissed for Failure to Pay the Filing Fee.

Receiving this order can be alarming, but in many cases it is easily resolved.

Why Did I Receive an Order to Show Cause?

When I file a Chapter 7 bankruptcy case for a client, the Bankruptcy Court requires that the filing fee either be:

• Paid in full at filing;
• Paid under an approved installment payment plan; or
• Waived by the Court if the debtor qualifies.

If the required payment is not made by the applicable deadline, the Court may issue an Order to Show Cause requiring you to explain why your bankruptcy case should not be dismissed.

The purpose of the hearing is straightforward—the judge wants to determine whether there is a good reason why the filing fee has not been paid.

The Good News: You Can Usually Avoid the Hearing

Fortunately, in most situations, there is a very simple solution. Pay the Bankruptcy Court Filing Fee immediately.

If the filing fee is paid before the scheduled show cause hearing date, the Bankruptcy Court will generally cancel the hearing automatically.

That means:

• You do not need to appear.
• You do not need to call the Court.
• Your bankruptcy case continues normally.

This is one of the most common reasons a scheduled show cause hearing never actually takes place.

What Happens If the Filing Fee Is Not Paid?

If the filing fee remains unpaid by the hearing date, you should not ignore the Court’s order.

Instead, you should be prepared to appear at the scheduled hearing and explain your circumstances.

In the United States Bankruptcy Court for the Eastern District of Michigan, these hearings are generally conducted by telephone rather than requiring you to travel to the courthouse.

The notice issued by the Court will include instructions on how to participate in the telephone hearing.

Your bankruptcy attorney will typically appear with you and explain your circumstances to the judge.

What Can the Judge Do?

At the hearing, the judge has several options.

Depending on the circumstances, the Court may:

• Allow additional time to pay the filing fee, however, pursuant to statute, all payments must be made within 120 days after the petition is filed. The court may, for cause, extend the time to pay an installment, but the last one must be paid within 180 days after the petition is filed;
• Enter another appropriate order; or
• Dismiss the bankruptcy case if the filing fee remains unpaid and no sufficient reason is provided.

Every case is different, and the Court will consider the specific facts before making a decision.

Why Dismissal Can Be a Serious Problem

Having your Chapter 7 bankruptcy case dismissed can create unnecessary complications.

If your case is dismissed:

• The automatic stay protecting you from creditors usually ends.
• Wage garnishments may resume.
• Collection lawsuits may continue.
• Foreclosure proceedings may move forward.
• Creditors may resume collection calls and letters.
• If you later need to file another bankruptcy case, additional rules regarding the automatic stay could apply.

For these reasons, it is extremely important to address any filing fee issues as soon as possible.

Don’t Ignore Court Notices

One of the biggest mistakes I see is people setting aside court notices because they assume the problem will somehow resolve itself.

It won’t.

If you receive an Order to Show Cause, read it carefully and contact your attorney immediately.

In many situations, simply paying the remaining filing fee before the hearing completely resolves the issue.

How I Help My Clients

When I represent clients in Chapter 7 bankruptcy cases, I closely monitor filing fee deadlines and other court requirements to help prevent avoidable problems.

If an Order to Show Cause is issued, I work with my clients to determine the quickest and most effective way to resolve the issue. Frequently, paying the filing fee before the hearing date results in the hearing being canceled, saving my clients both time and stress.

Contact the Law Offices of Walter Metzen

If you have received an Order to Show Cause for Failure to Pay the Bankruptcy Filing Fee, don’t panic—but don’t ignore it either. The best course of action is to pay the filing fee right away, then you do not have to attend the hearing and in most cases, you will receive your Bankruptcy Discharge Order shortly thereafter.

I have represented thousands of individuals and families throughout Metropolitan Detroit in Chapter 7 and Chapter 13 bankruptcy cases. I can help you understand what the Court’s order means, explain your options, and work toward keeping your bankruptcy case on track.

If you have questions about your bankruptcy case or have received a notice from the Bankruptcy Court, contact the Law Offices of Walter Metzen today. Acting promptly can often prevent unnecessary complications and help you obtain the fresh financial start that bankruptcy is designed to provide.