How Much Does Bankruptcy Cost?

Chapter 7 bankruptcy provides relief for individuals and businesses that have no hope of ever repaying their debts. That’s why it seems strange to some that there are actual costs involved to get this relief. Keep in mind, though, that everyone’s case is different and someone’s inability to pay their debts as they come due does not necessarily mean that they can’t pay the costs of filing a Chapter 7. Let’s take a look at what they are. 

Bankruptcy costs include court filing fees, credit counseling course fees, and if you hire a bankruptcy lawyer, attorney fees. The total cost will largely depend on your financial situation, the complexity of your case, and the type of bankruptcy you file (most consumers file either Chapter 7 or Chapter 13 bankruptcy). 

Read on to learn about how much it costs to file bankruptcy along with helpful, cost-reducing options that may be available to you.

Bankruptcy Court Filing Fees

The bankruptcy court filing fee for Chapter 7 bankruptcy is $338. It’s due when the bankruptcy petition is filed, unless the court grants an exception to this rule. 

Since Chapter 7 bankruptcy is only available to consumers who pass the means test, the bankruptcy laws provide two exceptions to this requirement. 

• Paying the fee in installments

• Fee waivers

Paying the Fee in Installments

You can ask the court to pay the filing fee in installments - to make payments to the court. This gives you the benefit of immediate bankruptcy protection from creditors (the automatic stay) without having to come up with the full amount all at once. For folks who are getting their wages garnished, this is especially helpful as the garnishment has to stop once the bankruptcy petition has been filed with the court. 

All installment payments must be paid within 120 days after bankruptcy filing. If the bankruptcy court approves your application, the payment due dates will be listed in the court's Order Approving Payment of Filing Fee in Installments. 

If you plan on asking to pay in installments, it’s important to do two things before filing: 

1. Fill out the application to pay the filing fee in installments

2. Find out how much your bankruptcy district charges as a down payment with the application

The down payment counts towards the total fee. Each bankruptcy district sets its own minimum. 

Asking for a Fee Waiver

If your application for a fee waiver is granted, you won’t have to pay a court filing fee at all. 

To be eligible to apply for a fee waiver your income must fall below 150% of the poverty line for your state and household size. Being eligible to apply for a fee waiver doesn't mean that you will automatically get it. 

The bankruptcy court will review your fee waiver application and decide if it's appropriate in your case. The judge will look at your income, expenses, and assets when making this decision. 

If your fee waiver is denied, the bankruptcy court will typically give you the chance to pay the filing fee in installments based on a set payment plan. But, that’s not always true, so if possible have a plan B to come up with the full $338 quickly if needed. 

Chapter 13 Court Filing Fee

The Chapter 13 bankruptcy filing fee is $313. Fee waivers are not available in Chapter 13 cases. Chapter 13 cases require that the filer have disposable income to make monthly plan payments to the trustee. Not being able to pay the filing fee would make it hard for the court to believe that a Chapter 13 repayment plan can be proposed in good faith.

You can ask the court to pay the filing fee in installments. This can be helpful if you have to file quickly to stop a foreclosure, but don't have the full amount available.  

Credit Counseling Course Fees

Everyone who files for bankruptcy must take two educational courses:

• A credit counseling course must be taken before filing. 

• A debtor education course must be completed after filing.

The courses are the same for both Chapter 7 and Chapter 13 cases. The purpose of mandatory credit counseling is to help you explore if bankruptcy is the right debt relief solution for you. The second course, debtor education, is a mandatory two-hour course in personal financial management designed to teach strategies on handling finances after bankruptcy. Both courses can be completed online and generally are inexpensive and not too time-consuming.

The costs of either course can't be more than $50 unless the provider gets a special exemption from the U.S. Trustee's Office. The courses must be taken through approved providers and the cost will depend on which provider is chosen. The U.S. Trustee Program maintains a database of approved credit counseling agencies by state and a list of approved providers of debtor education. 

Approved credit counseling agencies are required to operate as nonprofit entities, so the cost tends to be slightly lower for the first course than the second course. Generally speaking, you can expect to pay less than $25 for the credit counseling fee and less than $50 to complete debtor education.

If your income is less than 150% of the federal poverty guidelines, you can ask the course provider to waive the fee. 

The filing fee and the course fees are the same for pro se filers, folks going through legal aid, and filers who have a bankruptcy lawyer help them. If you hire a bankruptcy lawyer, you’ll also have to pay attorney fees. 

How Much Does a Lawyer Charge for Chapter 7?

Depending on your case, the total cost of filing bankruptcy might include attorney fees. 

Know that you always have the right to for bankruptcy protection pro se - on your own without a bankruptcy attorney. And our free online tool helps qualifying low-income filers through the bankruptcy process. However, no matter your situation, it isn't a bad idea to meet with a bankruptcy lawyer for a free consultation and learn what type of legal help you may be able to afford. 

Flat Fees vs. Hourly Fees

Most attorneys handle Chapter 7 bankruptcy cases on a flat fee. This means that they charge a set amount up-front for the legal services involved in preparing and filing a Chapter 7 case. An attorney-client agreement should list what legal services the flat fee covers and explain what to expect if something happens that isn’t covered by the flat fee. 

The benefit to the flat fee option is that barring unforeseen situations you'll know from the start exactly how much your bankruptcy attorney fees will cost. The alternative to charging a flat fee is charging an hourly fee. The hourly rate should also be included in a written agreement between the attorney and client. It's possible, but rare, for a bankruptcy law firm to bill hourly attorney fees for filing a Chapter 7 consumer bankruptcy. 

Amount of Attorney Fees

Flat fees for filing bankruptcy can vary greatly depending on the complexity of your case. For example, owning property, having a lot of unsecured debt, recently acquired credit card debt, or having a high income can increase attorney fees in a Chapter 7 case. 

Payment Plans

Most filers don't have to come up with the bankruptcy fees all at once. Just as the bankruptcy court sometimes allows installment payments for the filing fee, most bankruptcy attorneys allow installment payments for the attorney fees. 

Know that bankruptcy attorney fees for Chapter 7 cases typically have to be paid in full before the attorney files the case. This is because of the automatic stay, which stops your creditors from attempting to collect on a debt you owe them. 

If you owe your bankruptcy attorney money at the time of filing, they become one of your creditors banned by the automatic stay from trying to collect the balance from you. Then, so long as you receive a bankruptcy discharge of your debts, your attorney would never legally be allowed to bill you or otherwise try to collect payment.

Chapter 13 Attorney Fees

Attorney fees for a Chapter 13 bankruptcy tend to be more expensive than attorney fees for a Chapter 7 bankruptcy case. There's a much greater workload associated with filing a Chapter 13 case. 

Unlike Chapter 7 bankruptcies, which usually take around four months to complete, Chapter 13 cases are open for 3 to 5 years. Plus, Chapter 13 bankruptcies are more complex and must include a proposed repayment plan specifying which creditors will be repaid and by how much, which requires court approval. 

It isn't necessary to pay all of the attorney fees upfront in a Chapter 13 case as it is in a Chapter 7 case. Usually, a Chapter 13 bankruptcy lawyer will require a portion of the attorney fees be paid before filing the case. The remaining attorney fees will get paid through the Chapter 13 plan. The filer will make a monthly payment to the trustee, who will then make payments to the filer's creditors – including their attorney who filed the case. Outstanding attorney fees at the time of filing are not paid in addition to the plan payment, they're part of the plan payment. 

Lawyers can ask for priority to receive full payment before certain other creditors. This helps attorneys be more willing to file Chapter 13 cases before full payment of attorney fees because it minimizes the risk of not being paid if the filer later stops making plan payments.

A lot of attorneys use the flat fee system for attorney fees in Chapter 13 bankruptcy cases, too. Many bankruptcy court districts have "no look" fees, which are flat fees attorneys can charge for filing Chapter 13 cases that the court presumes are reasonable and don't require a fee application. Some attorneys handle Chapter 13 cases on an hourly basis, but they typically have to submit a detailed fee application to the court. Whether flat fee or hourly, all attorney fees paid through the Chapter 13 plan are subject to court approval. 

Other Costs 

There are a few other costs that arise when filing bankruptcy, though they’re typically in the form of printing costs or travel expenses. Here is a brief overview of some of the most common additional costs associated with a bankruptcy filing. 

A bankruptcy case requires a lot of paperwork. The bankruptcy petition is usually over 60 pages. Depending on your district, it may be necessary to print multiple copies. Plus, copies of certain documents need to be sent to the trustee. The printing costs of this paperwork can add up, especially if you don't own a printer and need to pay a printing and copy service per page.

Other bankruptcy costs can include mailing documents to the court or bankruptcy trustee, mailing notices to creditors accidentally left off your original filing and added later, fees to file amendments, travel to and parking for the Meeting of Creditors, and possibly lost wages for time off work to attend that meeting.

How Can I File Bankruptcy With No Money?

Upsolve’s free web app enables filers to prepare their bankruptcy forms without the help of an attorney and provides a number of free resources and information about how to navigate the Chapter 7 bankruptcy process.

If you're eligible for a fee waiver, using Upsolve's free tool can help you file bankruptcy with no money.