How Much Does It Cost to File for Bankruptcy?
You’re filing for bankruptcy because you’re having a hard time paying all of your debts, but unfortunately filling for bankruptcy isn’t free. Doing so requires court fees, credit counseling fees, and, most likely, attorney fees. The amount of those fees depends on the type of bankruptcy.
Chapter 7 vs. Chapter 13
The most common form of bankruptcy for individuals is Chapter 7, which effectively wipes the slate clean for the debtor after certain assets are liquidated and the resulting cash is distributed to creditors. Another common option is Chapter 13 bankruptcy, which allows the debtor to keep a valuable asset by agreeing to a payment plan. For example, if the debtor wants to keep his house, Chapter 13 would allow him to make payments through a trustee, and the debtor would be protected from any legal action creditors could take.
Bankruptcy Filing Costs
As of 2018, the fees set by the United States Court are $335 to file Chapter 7 bankruptcy and $310 to file Chapter 13 bankruptcy. If an attorney or bankruptcy filing service claims your bankruptcy can be filed for less than this, it's likely a scam.
These are the basic filing fees. Certain actions in your case may incur additional fees. For example, there are additional fees to convert a Chapter 13 case to a Chapter 7 case, to reopen a bankruptcy case, or for payments returned for insufficient funds. USCourts.gov maintains a list of all bankruptcy fees.
Installment Payments and Waiver Possibilities
Fees typically are due when you file your bankruptcy petition, but you may be able to ask the court to allow you to pay the fees in installments or even have them waived. To qualify for a fee waiver, you must not be able to afford the fees, even in installments, and your income must be less than 150 percent of the poverty line. The U.S. Department of Health and Human Services publishes federal poverty levels, which vary depending on the number of people per household.
Required Credit Counseling Costs
Before you can file for bankruptcy, you must take a court-approved credit counseling session. In addition, you’ll have to take a financial management course. These courses usually come with a small fee from the provider. Course costs are typically less than $100. The U.S. Department of Justice website has a list of agencies approved in each state. Visit their websites to find the cost of their bankruptcy-required courses.
Attorney fees vary widely depending on the state, the attorney, and the complexity of your bankruptcy case. For a Chapter 7 case, your fees could range from less than $1,000 to as much as about $3,500. Chapter 13 cases typically are more expensive and likely will cost at least as much as $2,500 and could go as high as $6,000.
Unless you are an expert on the rules of the court where you file, the U.S. Bankruptcy Code, and federal procedures, you should expect to need an attorney to file your case. If you file on your own behalf, know that judges and other court employees are prohibited from providing you with legal advice.
Don’t let the potential cost of filing bankruptcy scare you away from the option. Many attorneys offer free or discounted consultations to help you figure out if you need to file bankruptcy and to estimate the total cost of filing bankruptcy if you need to file. Meet with a few attorneys who offer free consultations to see what your options are. You may be able to pay your attorney in installments, but be aware that the attorneys may spend only as much time on your case as you’ve paid for. Once your retainer runs out, you’ll need to make another payment to continue work on your case.