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How Much Does It Cost to File Bankruptcy?

How Much Does It Cost to File Bankruptcy?

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How much does it cost to file bankruptcy?

The cost depends on whether you’re filing a Chapter 7 or Chapter 13 bankruptcy case.

Most of the cases filed in the U.S., about 71%, are Chapter 7 cases. The rest of the cases, about 29%, are Chapter 13 cases.

What’s the difference between Chapter 7 and Chapter 13 cases?

The major difference between the two types is the income level of the debtor.

Find out what the costs are and what you need to do when filing bankruptcy.

Counting the Cost to File Bankruptcy

Different Fees To File Bankruptcy

You have to file some documents and pay certain fees to file bankruptcy.

1. Bankruptcy filing cost

Bankruptcy Filing Cost | How Much Does It Cost to File Bankruptcy

When you file bankruptcy, you have to fill up some forms and pay the court a filing fee.

The amount depends on the type of case you want to file.

  • Chapter 7 case filing cost: $335
  • Chapter 13 case filing fee: $310

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U.S. courts require the payment of these fees but these can be paid in installments. If a lawyer or company says you can pay a lower amount, don’t believe them. It’s possibly a scam.

2. Lawyer’s fees in bankruptcy cases

You can file for bankruptcy on your own (“pro se” or without the help of a lawyer).

However, the success rate of bankruptcy cases without lawyers is very low.

If you file a bankruptcy case on your own, you will only spend $350-$450.

A Chapter 7 case with an attorney will cost $1,500-$3,000 while a Chapter 13 case will amount to $3,000-$4,000.

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Lawyers’ fees vary from state to state. Lawyers also charge more if the bankruptcy case is complicated.

But check to see if your state provides free legal advice to low-income individuals.

3. Conversion fee

Sometimes, a person needs to convert from one type of bankruptcy to another. This happens when there’s a change in a person’s financial situation.

There’s no conversion fee to switch from a Chapter 7 bankruptcy case to Chapter 13.

On the other hand, you’d have to pay $25 to convert from Chapter 13 to Chapter 7.

4. Financial counseling fee

Financial Counseling Fee | How Much Does It Cost To File Bankruptcy

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires filers to undergo a government-approved credit counseling program.

Credit counseling or financial management courses cost anywhere between $20-$100.

What You Need to Do to File Bankruptcy

1. Assess your financial situation.

Check the requirements for Chapter 7 or 13 bankruptcy. See if you are eligible to file such petitions.

2. Study your debts

how much does it cost to file bankruptcy

Check which debts can be discharged under Chapter 7 or 13 bankruptcy.

Debts like child support obligations cannot be discharged.

If you’re hiring a lawyer, be ready with all the documents related to your debts.

Get everything organized.

3. Determine your property exemptions

4. Fill up forms and pay court fees

You have to fill out some forms and pay court fees. On these forms, you will indicate your income, expenses, properties, debts, and creditors.

Forms can be downloaded from the U.S. Courts website.

You can keep some properties even after filing bankruptcy.

The rule varies from state to state. Check which properties you can retain.

5. Go to a meeting


Usually, filers only need to go to court once for a brief meeting with a creditor or trustee.

Be ready to answer whatever questions they may raise about your case.

6. Settle your secured debts

A secured debt is guaranteed by a collateral or a property that was promised by the borrower in exchange for a loan.

You have to settle your secured debts before the court can close your case.

7. Get your discharge

The court will release an order discharging your debts officially. This means that you are no longer required to pay the debt.

8. Move on.

Filing bankruptcy can be depressing. However, this happens to a lot of people.

Medical debt is the number one reason why Americans are filing for bankruptcy, USA Today reported.

But, many companies are also filing for bankruptcy. In fact, Marketplace.org reported that clothing stores where you shopped as a teen are closing.

You can rebuild your life after filing bankruptcy. Accept what happened then regroup.

Grow your finances, improve your credit rating, and have a more positive outlook in life. You can do it!

Rapper 50 Cent is one of the celebrities who had bankruptcy cases. Check out the video below to hear a Forbes’ analyst’s view about 50 Cent’s bankruptcy case:

Filing for bankruptcy costs some amount of money. It may be a black mark on your financial record but it’s an option if you are burdened with debt.

People are usually divided on the issue of bankruptcy. People are often worried about the costs of filing bankruptcy too. Share your thoughts on the issue in the comments below!

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