If you’re one of the millions of Americans struggling with their finances, you might be considering bankruptcy as an option for alleviating your debt. If your debt has become unmanageable, filing for bankruptcy can help reduce your stress and worries about paying off debts. However, this is a serious decision that should not be made lightly. While bankruptcy allows you to eliminate unsecured debts, this freedom does not come with zero costs.
As people who are considering bankruptcy tend to have money problems, one of their biggest concerns is how much it will cost them. The cost of filing depends on various factors, including how much money you owe, the types of assets you have, and what type of bankruptcy you file.
For example, filing for Chapter 7 bankruptcy typically costs less than filing for Chapter 13 because it does not require repayment plans or court-supervised payments. But the total costs will vary depending on the specific circumstances of your situation.
In this article, we will review the various costs associated with bankruptcy so you can know what to expect if you choose to move forward. Reviewing these expenses can help you determine if bankruptcy is the right decision for you and your family.
Chapter 7 vs Chapter 13 Bankruptcy
There are two types of consumer (personal) bankruptcies you can choose between: Chapter 7 and Chapter 13.
Chapter 7 is known as a “liquidation” bankruptcy and is the faster option of the two. With Chapter 7, the bankruptcy court will eliminate (discharge) your unsecured debts, but you have to allow a court-appointed trustee to liquidate your assets to pay back your creditors.
With Chapter 13, on the other hand, your debts are not immediately eliminated. Instead, they are reorganized into a 3-to-5-year repayment plan. Therefore, Chapter 13 allows you to pay off your debts over time without having to liquidate your assets.
Bankruptcy Court Filing Fees
A filing fee is a cost that you pay the bankruptcy court to open your bankruptcy case when you submit a bankruptcy petition. You cannot file for bankruptcy without paying the filing fee.
Credit Counseling Fee
Before you can file for Chapter 7 or Chapter 13 bankruptcy, you are legally required to participate in credit counseling with a nonprofit agency. The credit counseling fee will vary depending on the provider, but it generally will cost between $15 and $50 to complete your pre-bankruptcy credit counseling. Some agencies don’t charge anything, and they all are required to counsel you regardless of your ability to pay, so let someone know if you can’t afford the fee.
Bankruptcy filers must also take a post-bankruptcy debtor education course as a requirement for receiving a bankruptcy discharge. These courses usually cost between $35 and $50. However, if you can’t afford to pay this fee, you can request that the provider waive or reduce the fee.
Fee in Installments
If you cannot pay the entire filing fee upfront but want to file for Chapter 7 bankruptcy, you can request to pay the fee in installments by submitting Form 103A (Application for Individuals to Pay the Filing Fee in Installments). The form must claim that you cannot pay the fee without installments and propose a payment schedule. The proposed payment schedule can have a maximum of four payments, and the final installment must be made no later than 120 days after filing your petition.
Chapter 13 bankruptcy petitioners are not eligible to pay their filing fees in installments.
Fee Waiver
If you can’t afford to pay a filing fee at all, even in installments, you might be wondering how to file a bankruptcy with no money. In this situation, you can qualify for a fee waiver for your Chapter 7 filing fee if:
- You cannot afford to pay it in installments, and
- Your income is below 150% of the poverty line.
You can request a fee waiver by submitting Form 103B (Application to Have the Chapter 7 Filing Fee Waived). Unfortunately, Fee Waivers are not available for Chapter 13 bankruptcy cases.
Attorney Fees
Attorney fees can vary greatly depending on the type of bankruptcy you file, the facts of your case, and the prestige and experience of the lawyer you choose to represent you. The cost of legal fees for a Chapter 7 bankruptcy generally ranges from $1,000 to $3,500.
Chapter 13 cases are usually more expensive than Chapter 7 filings. Most courts have created acceptable guideline fees limiting how much an attorney can charge in a Chapter 13 bankruptcy case. While the guideline fees differ between courts, they usually range between $2,500 and $6,000.
Extra Bankruptcy Fees
The bankruptcy court also charges miscellaneous fees for various services. Some of the most commonly-assessed fees include:
- $0.50 per page for copying/ reproduction.
- $31 per record for reproducing and transmitting electronic records stored outside the court’s electronic case management system.
- $11 for certifying a document.
- $23 for exemplifying a document.
- $32 for reproducing audio recording of a court proceeding
- $32 for conducting a search of bankruptcy court records
There are also filing fees if you need to file an additional legal document in your case.
Bankruptcy Fees
The chart below shows the most critical bankruptcy fees for each chapter.
| Expense | Cost |
|---|---|
| Chapter 7 Filing Fee | $320 |
| Chapter 13 Filing Fee | $310 |
| Pre-Bankruptcy Credit Counseling | $0-$50 |
| Post-Bankruptcy Debtor Education | $0-$50 |
| Chapter 7 Attorney Fees | $1,000 to $3,500 |
| Chapter 13 Attorney Fees | $2,500 to $6,000 |
| Chapter 7 Total | $1,338 to $3,938 |
| Chapter 13 Total | $2,813 to $6,413 |
As you can see, your costs can vary greatly depending on the chapter of bankruptcy you choose to file. To obtain the full benefits of bankruptcy, you must select the right chapter for your financial circumstances. An experienced bankruptcy attorney can review your situation and advise you on which chapter will best meet your needs.
Helpful Resources:
Bankruptcy - US Court
Bankruptcy Basics - US Court
Bankruptcy Fee Schedule - US Court
If you’re one of the millions of Americans struggling with their finances, you might be considering bankruptcy as an option for alleviating your debt. If your debt has become unmanageable, filing for bankruptcy can help reduce your stress and worries about paying off debts. However, this is a serious decision that should not be made lightly. While bankruptcy allows you to eliminate unsecured debts, this freedom does not come with zero costs.
As people who are considering bankruptcy tend to have money problems, one of their biggest concerns is how much it will cost them. The cost of filing depends on various factors, including how much money you owe, the types of assets you have, and what type of bankruptcy you file.
For example, filing for Chapter 7 bankruptcy typically costs less than filing for Chapter 13 because it does not require repayment plans or court-supervised payments. But the total costs will vary depending on the specific circumstances of your situation.
In this article, we will review the various costs associated with bankruptcy so you can know what to expect if you choose to move forward. Reviewing these expenses can help you determine if bankruptcy is the right decision for you and your family.
Chapter 7 vs Chapter 13 Bankruptcy
There are two types of consumer (personal) bankruptcies you can choose between: Chapter 7 and Chapter 13.
Chapter 7 is known as a “liquidation” bankruptcy and is the faster option of the two. With Chapter 7, the bankruptcy court will eliminate (discharge) your unsecured debts, but you have to allow a court-appointed trustee to liquidate your assets to pay back your creditors.
With Chapter 13, on the other hand, your debts are not immediately eliminated. Instead, they are reorganized into a 3-to-5-year repayment plan. Therefore, Chapter 13 allows you to pay off your debts over time without having to liquidate your assets.
Bankruptcy Court Filing Fees
A filing fee is a cost that you pay the bankruptcy court to open your bankruptcy case when you submit a bankruptcy petition. You cannot file for bankruptcy without paying the filing fee.
Credit Counseling Fee
Before you can file for Chapter 7 or Chapter 13 bankruptcy, you are legally required to participate in credit counseling with a nonprofit agency. The credit counseling fee will vary depending on the provider, but it generally will cost between $15 and $50 to complete your pre-bankruptcy credit counseling. Some agencies don’t charge anything, and they all are required to counsel you regardless of your ability to pay, so let someone know if you can’t afford the fee.
Bankruptcy filers must also take a post-bankruptcy debtor education course as a requirement for receiving a bankruptcy discharge. These courses usually cost between $35 and $50. However, if you can’t afford to pay this fee, you can request that the provider waive or reduce the fee.
Fee in Installments
If you cannot pay the entire filing fee upfront but want to file for Chapter 7 bankruptcy, you can request to pay the fee in installments by submitting Form 103A (Application for Individuals to Pay the Filing Fee in Installments). The form must claim that you cannot pay the fee without installments and propose a payment schedule. The proposed payment schedule can have a maximum of four payments, and the final installment must be made no later than 120 days after filing your petition.
Chapter 13 bankruptcy petitioners are not eligible to pay their filing fees in installments.
Fee Waiver
If you can’t afford to pay a filing fee at all, even in installments, you might be wondering how to file a bankruptcy with no money. In this situation, you can qualify for a fee waiver for your Chapter 7 filing fee if:
- You cannot afford to pay it in installments, and
- Your income is below 150% of the poverty line.
You can request a fee waiver by submitting Form 103B (Application to Have the Chapter 7 Filing Fee Waived). Unfortunately, Fee Waivers are not available for Chapter 13 bankruptcy cases.
Attorney Fees
Attorney fees can vary greatly depending on the type of bankruptcy you file, the facts of your case, and the prestige and experience of the lawyer you choose to represent you. The cost of legal fees for a Chapter 7 bankruptcy generally ranges from $1,000 to $3,500.
Chapter 13 cases are usually more expensive than Chapter 7 filings. Most courts have created acceptable guideline fees limiting how much an attorney can charge in a Chapter 13 bankruptcy case. While the guideline fees differ between courts, they usually range between $2,500 and $6,000.
Extra Bankruptcy Fees
The bankruptcy court also charges miscellaneous fees for various services. Some of the most commonly-assessed fees include:
- $0.50 per page for copying/ reproduction.
- $31 per record for reproducing and transmitting electronic records stored outside the court’s electronic case management system.
- $11 for certifying a document.
- $23 for exemplifying a document.
- $32 for reproducing audio recording of a court proceeding
- $32 for conducting a search of bankruptcy court records
There are also filing fees if you need to file an additional legal document in your case.
Bankruptcy Fees
The chart below shows the most critical bankruptcy fees for each chapter.
| Expense | Cost |
|---|---|
| Chapter 7 Filing Fee | $320 |
| Chapter 13 Filing Fee | $310 |
| Pre-Bankruptcy Credit Counseling | $0-$50 |
| Post-Bankruptcy Debtor Education | $0-$50 |
| Chapter 7 Attorney Fees | $1,000 to $3,500 |
| Chapter 13 Attorney Fees | $2,500 to $6,000 |
| Chapter 7 Total | $1,338 to $3,938 |
| Chapter 13 Total | $2,813 to $6,413 |
As you can see, your costs can vary greatly depending on the chapter of bankruptcy you choose to file. To obtain the full benefits of bankruptcy, you must select the right chapter for your financial circumstances. An experienced bankruptcy attorney can review your situation and advise you on which chapter will best meet your needs.
Helpful Resources:
Bankruptcy - US Court
Bankruptcy Basics - US Court
Bankruptcy Fee Schedule - US Court
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