How Much Does it Cost to File Bankruptcy?

The thought of paying to file bankruptcy seems counterintuitive. When you have significant debts, however, the cost of bankruptcy can pale in comparison.

How much are bankruptcy court fees?

There are two types of bankruptcy available to most individuals and couples. The first is Chapter 7 bankruptcy. Chapter 7 bankruptcy is reserved for those whose incomes are at or below their state’s median income. During the Chapter 7 process, a bankruptcy trustee liquifies your assets and pays your creditors to the greatest extent possible. After that, the remaining eligible debts are erased, allowing you to get a fresh start.

The court costs associated with Chapter 7 bankruptcy are a $245 filing fee, a $75 administrative fee, and a $15 trustee fee. This is true whether you’re filing as an individual or as a couple. While all fees are due when your bankruptcy petition is filed, you’re allowed to ask to pay the fee in up to four installments. The last installment has to be paid within 120 days of filing the bankruptcy petition. You’re allowed to ask for a two-month extension if you have a hardship. If your income is less than 150 percent of the poverty level, then you can ask that the fees be waived altogether.

The Chapter 13 process is available to those who don’t meet the requirements for Chapter 7 or who want to avoid asset liquidation. Chapter 13 involves working out a repayment plan based on your disposable income. The repayment term is either three or five years, after which the balances of eligible debts are erased.

The court costs for Chapter 13 closely mirror those of Chapter 7. The differences are that there is no trustee fee and no poverty exemption.

How much are bankruptcy attorney fees?

The fees that a bankruptcy attorney charges can depend upon where you live and the complexity of your case. For a Chapter 7 bankruptcy, it’s common for an attorney to charge between $1,200 and $2,500. Chapter 13 bankruptcy fees may be higher if you have many creditors, many income streams, or several types of non-dischargeable debts, or have previously filed for bankruptcy.

Bankruptcy courts have guidelines that govern what are considered reasonable attorney fees. When fees fall within these guidelines, they typically aren’t reviewed. Judges can, however, review fees to ensure that they’re aligned with what’s considered reasonable.

When it comes to filing bankruptcy, it pays to have a skilled attorney by your side.