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Who Pays for Bankruptcies?

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In a Nutshell

When individuals find themselves in debt, bankruptcy can be a solution that gives you a fresh start. But when someone files for bankruptcy, who pays for it? Learn more here.

Written by Rohan Pavuluri
Updated July 22, 2020

If you are faced with overwhelming debt, you’re not alone. Many Americans today are drowning in financial burden and are in need of a solution. Fortunately, filing for bankruptcy can be the answer to all of your financial problems and provide you with the relief that you need. Once you’ve made the decision to file for bankruptcy and start fresh, you may wonder who exactly pays for bankruptcies? Where does all of that money go?  

Bankruptcy Pays for Itself

Filing for bankruptcy isn’t completely free. So, oftentimes, bankruptcy pays for itself. Between petition fees, liquidation of assets, and for some, repayments plans, a portion of the debt owed is paid through the bankruptcy process alone.

Cost of Personal Bankruptcies

Although the bankruptcy process does help pay for the debt, it typically only attributes a small portion of what was originally owed. So, the company that an individual owes money to usually has to absorb their losses. Sometimes, this can lead to the temporary raises in operating costs or a long term overall costs to consumers.

Upsolve User Experiences

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AdeYemi Azeez
Ade Yemi Azeez
★★★★★ 7 hours ago
I'm incredibly thankful for Upsolve's help during my Chapter 7 bankruptcy. Their user-friendly platform and step-by-step guidance made the process manageable. The team's prompt and compassionate support were invaluable, addressing all my questions and easing my anxieties. Upsolve doesn't just offer a service; they provide understanding and empowerment through educational resources. I highly recommend Upsolve to anyone navigating Chapter 7 – they were my guiding light during a challenging time!
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Lee Powers
Lee Powers
★★★★★ 1 day ago
The last thing that you want to do, when you can’t pay those ridiculous credit cards, is to pay an attorney$$$$ to help to not pay those cards. This is where this organization comes in. If you look up all the paperwork that goes into filing a Bankruptcy Case it will blow your mind! Questions quickly come up like …What do I need / What don’t I need. So because my Brother had just filed $2000 with an attorney. He discovered after about this Upsolve organization, and let me say… it is a very good thing. You answer a bunch of questions it takes a while and then after they have there team Kind LAWYERS look at it couple weeks, you print out and sign and file it, I mailed it into the Court. It is important to follow their checklist, which includes the credit counseling, that all Courts Require. Thank you 🙏 Upsolve Team
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Connor Norris
Connor Norris
★★★★★ 2 days ago
thanks guys. what an amazing service. its inspiring in that its free and ultimately for the benefit of all.
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Cost of Corporate Bankruptcies

When a company files for bankruptcy the result can have societal impacts. Oftentimes, this results in job losses and increased prices of goods. So, when it comes to corporate bankruptcies, the employees and consumers are typically the ones who are helping pay for the debt through layoffs and a more expensive product.

Should I File for Bankruptcy?

Filing for bankruptcy can be a tough decision. With many options to weigh, bankruptcy may be the solution that you have been looking for. If you’re drowning in crippling debt and are unable to repay your debt in the foreseeable future, then bankruptcy can be the lifeline that you need.

Let Upsolve Help

If you’ve made the decision to file for bankruptcy, Upsolve can help. We offer a totally free online bankruptcy tool and access to expert bankruptcy attorneys for qualified individuals. If you do not qualify for our free services, we can also set you up with a knowledgeable, paid lawyer, and you’ll receive a free consultation before you file for bankruptcy. Complete our quick and easy form to see if you qualify for our free services. We look forward to helping you take back control of your finances and start fresh.

Written By:

Rohan Pavuluri


Rohan Pavuluri is the volunteer Board Chair of Upsolve, one of America's leading resources helping low-income and working-class families overcome financial distress. Pavuluri served as CEO of Upsolve until May 2022. He graduated from Harvard College in 2018 and was named to the T... read more about Rohan Pavuluri

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Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can't access their basic rights when they can't afford to pay for help. Combining direct services and advocacy, we're fighting this injustice.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.