A Complete Breakdown of Bankruptcy Costs

Considering bankruptcy can be a stressful process, and worrying about the cost shouldn’t add to your burden. You clicked here to understand the real expenses involved, and that’s exactly what we’ll provide. This guide breaks down every fee, from court costs to attorney services, giving you a clear financial picture.

The Three Main Costs of Filing for Bankruptcy

When you file for bankruptcy, the total cost is not just one single number. It’s made up of three primary components: court filing fees, mandatory course fees, and attorney fees. While some costs are fixed, others can vary significantly based on your location and the complexity of your case. Let’s examine each one in detail.

1. Court Filing Fees

This is a fixed administrative fee you pay directly to the U.S. Bankruptcy Court to officially open your case. These fees are set at the federal level, so they are the same in every state. It’s important to know which type of bankruptcy you plan to file, as the fees are different.

Chapter 7 Bankruptcy Fee: The current filing fee for a Chapter 7 case is $338. This type of bankruptcy, often called “liquidation bankruptcy,” typically involves selling non-exempt assets to pay off creditors, with remaining eligible debts discharged.
Chapter 13 Bankruptcy Fee: The current filing fee for a Chapter 13 case is $313. This type of bankruptcy, known as “reorganization bankruptcy,” involves creating a 3-to-5-year repayment plan to pay back a portion of your debts.

Can You Waive Court Filing Fees? For individuals with very low income, there is help available. If you are filing for Chapter 7 and your household income is less than 150% of the federal poverty line, you may be eligible to have the entire $338 filing fee waived. You must file a formal application with the court, called an Application to Have the Chapter 7 Filing Fee Waived.

If you don’t qualify for a waiver but still can’t afford the fee upfront, the court may allow you to pay it in up to four installments. This option is not available for Chapter 13 filings, as the fee is typically paid through the repayment plan.

2. Mandatory Counseling and Education Course Fees

The federal government requires every individual who files for bankruptcy to complete two separate courses from government-approved agencies.

Pre-Filing Credit Counseling Course: Before you can file your bankruptcy petition, you must complete a credit counseling course. This course is designed to review your financial situation and explore any alternatives to bankruptcy.
Post-Filing Debtor Education Course: After you file your case, you must complete a debtor education or financial management course. This course teaches you skills for budgeting and managing your finances to help you avoid future financial trouble.

The cost for these courses is relatively low. You can expect to pay between $15 and $50 for each course. Many agencies offer them online or over the phone for convenience. Upon completion, you will receive a certificate that must be filed with the court.

3. Attorney Fees

This is the most significant and variable expense when filing for bankruptcy. While it is legally possible to file for bankruptcy on your own (this is called “pro se”), the process is complex and filled with potential pitfalls. A mistake on your paperwork could lead to your case being dismissed or you could lose assets you might have been able to protect.

Hiring an experienced bankruptcy attorney is highly recommended to ensure the process goes smoothly and your interests are protected. Attorney fees vary based on several factors:

Your Location: Fees are often higher in major metropolitan areas.
The Complexity of Your Case: A simple case with few assets and debts will cost less than a complex case involving a business, multiple properties, or high income.
The Type of Bankruptcy: Chapter 13 cases are almost always more expensive than Chapter 7 cases because they last for several years and require much more legal work from the attorney to create and manage the repayment plan.

Typical Attorney Fee Ranges:

Chapter 7 Attorney Fees: You can generally expect attorney fees for a Chapter 7 case to range from $1,200 to $3,000. Most attorneys will require this fee to be paid in full before they file your case.
Chapter 13 Attorney Fees: Because of the extended timeline and complexity, attorney fees for a Chapter 13 case typically range from $2,500 to $6,000. However, you often do not have to pay this entire amount upfront. A portion may be required to start, with the rest included as part of your monthly repayment plan.

Total Estimated Cost: Putting It All Together

To get a clear picture, let’s add up the typical costs for both types of consumer bankruptcy.

Estimated Total Cost for Chapter 7:

Court Filing Fee: $338
Counseling Courses: $30 - $100
Attorney Fee: $1,200 - $3,000
Total Estimated Range: $1,568 to $3,438

Estimated Total Cost for Chapter 13:

Court Filing Fee: $313
Counseling Courses: $30 - $100
Attorney Fee: $2,500 - $6,000
Total Estimated Range: $2,843 to $6,413

Frequently Asked Questions

Can I file for bankruptcy without a lawyer? Yes, you can file “pro se,” or without an attorney. However, it is very risky. The U.S. Courts strongly advise against it due to the legal complexity. A small mistake can lead to your case being dismissed, meaning you get no debt relief but still have a bankruptcy on your credit report.

How can I afford an attorney if I’m already broke? This is a common and valid concern. Many bankruptcy attorneys understand this and offer flexible payment options. For Chapter 7, they may allow you to pay the fee in installments before they file the case. For Chapter 13, a large portion of the fee is often rolled into the repayment plan, making it more manageable.

Are there any other hidden costs? In most standard cases, the three categories above cover all the costs. However, in more complex situations, there could be additional expenses. For example, you might need to pay for a professional appraisal of a home or business, or there could be extra fees if you need to amend your bankruptcy paperwork after filing. These are not common for the average filer.