How much does it cost to file for bankruptcy?

Filing for bankruptcy can cost anywhere from a few hundred to a few thousand dollars, depending on the type of bankruptcy filed and whether you hire an attorney or take a DIY approach.

Filing fees and other miscellaneous costs required to file a bankruptcy petition typically range from $300 to $400. If you’re filing on your own, you may not have to pay much more than that.

Working with a bankruptcy lawyer can add to those figures significantly. Their fees can vary widely based on the type of bankruptcy you file for, the market rate where your attorney practices and the complexity of your financial situation.

Coming up with any extra money might seem impossible if you’re already struggling to pay for basic expenses and creditors are breathing down your neck. Luckily, assistance may be available if you believe bankruptcy is the right choice for you.

Let’s look at the two common types of bankruptcy, the fees you may be responsible for and a few ways you might be able to pay for them.

• Chapter 7 bankruptcy vs. Chapter 13 bankruptcy
• Bankruptcy filing fees and other costs
• Bankruptcy attorney fees
• Ways to pay bankruptcy fees

Chapter 7 bankruptcy vs. Chapter 13 bankruptcy

There are two common types of bankruptcy you might consider as an individual consumer: Chapter 7 bankruptcy and Chapter 13 bankruptcy.

With Chapter 7 bankruptcy, many of your assets are liquidated, and the proceeds are used to repay your creditors. After your creditors are paid and your eligible debts are discharged, you’re no longer responsible for repaying your debts (as long as they’re included in the discharge).

Rather than having eligible debts completely discharged, Chapter 13 bankruptcy is more like an extended repayment plan. You develop a plan to repay your debts over a period of three to five years, giving you an opportunity to retain more of your assets than if you filed for Chapter 7 bankruptcy.

Can all debts be eliminated in a Chapter 7 bankruptcy?

While credit card debt and many other forms of debt can be eligible for discharge when you file Chapter 7, some are not. Examples of ineligible debts include alimony or child support, some taxes, certain student loans and more. If you have nondischargeable debt, you’ll be responsible for repaying it even if you file for Chapter 7 bankruptcy.

Bankruptcy filing fees and other costs

Bankruptcy court fees depend largely on the kind of bankruptcy.

For both Chapter 7 and Chapter 13 bankruptcy, you’ll be responsible for paying fees just to have the bankruptcy court hear your case. These can include …

• Filing fee — The cost to file for Chapter 7 is $335, and $310 for Chapter 13.
• Credit counseling fee — If you want to file for bankruptcy, you’re required to receive credit counseling first. Many agencies charge a nominal fee for this service, which can cost around $50, according to the Federal Trade Commission. If you can’t afford to pay, you may be able to get the fee waived.
• Additional fees — You must take a debt education course after you file for bankruptcy in order to get a discharge. The cost can range from $50 to $100, according to the FTC. If you can’t afford the fee, you may be able to get the provider to lower its fee or waive it completely.

Bankruptcy attorney fees

If you choose to work with a lawyer, legal service fees will probably account for the largest chunk of your bankruptcy costs. But it will almost certainly be worth it.

Bankruptcy laws are complicated, and you could lose income or property unnecessarily if you’re not familiar with the law. Sound legal advice can help protect you and improve your chances of receiving a favorable outcome.

“Our job is to make the bankruptcy process as simple as possible for [our] clients. We’re here to foresee any problems that can be … prevented,” says Ashley Morgan, a bankruptcy attorney in Northern Virginia. “It’s usually more time-consuming and costly for me to fix problems [after someone files on their own] than it is for me to prevent them.”

Average costs

The cost of hiring a bankruptcy attorney varies widely based on your location’s market rate and the complexity of your case.

In general, costs ranging from $500 to $3,500 are considered typical for Chapter 7. You’ll be required to pay the fee before you file, since attorney’s fees could qualify as part of the debt discharged in a successful Chapter 7 filing.

Fees for a Chapter 13 filing generally range from $2,500 to $6,000, but you don’t usually have to pay the entire fee upfront. You may be able to pay part of it before you file and cover the rest through your debt-repayment plan.

“No-look” fees

To protect consumers from being charged excessive fees, bankruptcy judges have the right to review attorney costs to ensure they’re reasonable. In fact, many courts have established “no- look” fees, which set a threshold under which the court typically won’t review your attorney costs (though it’s still an option at the discretion of the court).

If your lawyer charges fees above the “no-look” threshold, the fees may be reviewed to make sure they’re appropriate based on the details of your case.

Free consultations

“Most bankruptcy attorneys offer free consultations, [so] there’s no harm in at least meeting with an attorney,” Morgan says.

During the consultation, they’ll likely be able to give you an idea of how much it will cost for them to represent you. If you’re worried about how you’ll be able to pay for legal help, many lawyers are willing to set up payment plans.

“A lot of bankruptcy attorneys will [also] lower [their] fees if you’re really low income,” Morgan says.

Ways to pay bankruptcy fees

If you’re feeling overwhelmed about the fees required to file for bankruptcy — from the cost of filing to other court costs and legal fees — there are a few ways you might be able to reduce some expenses and raise money to pay for the rest.

• Set up a payment plan. When filing Chapter 7, you can ask the court if you can pay the filing fee in installments. Keep in mind that the entire fee must be paid within 120 days of filing, and in no more than four installments.
• Apply for a waiver. If you’re filing for Chapter 7, you can ask the court to waive the filing fee. To qualify for a waiver, you must not be able to afford the fee in installments and your income must be below the 150% mark of the federal poverty line.
• Get in touch with legal aid. Legal aid offices provide free legal advice to low-income individuals. If you qualify, they may choose to represent you for free.
• Find a lawyer who will work pro bono. Some attorneys dedicate a certain number of hours to helping individuals who can’t afford their services and do so free of charge. If you don’t have the money to pay for a lawyer, it may be worth looking for one who will take your case pro bono.
• Sell some of your possessions. The proceeds from these sales could raise the money you need to pay the necessary fees. But pre-bankruptcy sales can be tricky — it’s best to consult a bankruptcy lawyer to make sure you’re not risking further damage before making any sales.
• Ask for help. If you don’t qualify for assistance and you’re unable to raise the money on your own, consider asking family and friends for help.

Bottom line

Bankruptcy filing fees, credit counseling costs and fees for consumer education courses are well-established and consistent no matter where you live or how complicated your case is.

Attorney fees, on the other hand, vary widely and can increase your bankruptcy costs significantly. While the price might seem steep, it’s probably worth it to at least look into working with a lawyer when filing for bankruptcy.

If you feel as if all of these costs are just too much, that doesn’t mean you should cast aside bankruptcy if it looks like the best option for your situation. Consider some of the types of assistance that may be available to you, or seek out ways to raise the money you need to pay. The short-term cost could be worth the long-term relief.