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How Much Does It Cost to File for Bankruptcy? – Lexington Law

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Filing for bankruptcy is a process that can take more time and cost more money for a variety of reasons. There are some standard costs involved in all cases—less than $400 in court fees for filing paperwork and other surcharges—but this doesn’t account for attorney fees and payment plans.

In most cases, Americans pay between $400 to $4,000 in bankruptcy filing and attorney fees.

Bankruptcy Filing Fees

There are slightly different fees depending on whether you’re filing for a Chapter 7 or Chapter 13 bankruptcy. In both cases, the total cost in filing fees and surcharges is under $400 for the majority of people.

  • Chapter 7 filing costs: $245 filing fee, $75 administrative fee and $15 trustee surcharge
  • Chapter 13 filing costs: $235 filing fee and $75 administrative fee

Petitioners in both cases must also finish two mandatory bankruptcy education courses from approved credit counseling agencies. The federal government sets maximum allowable costs, and as such, the total cost to complete the courses is from $0 to $100.

Small additional costs may be added—$0.50 per page for reproducing documents, $11 for document certification and $22 for exemplification—among other miscellaneous fees that could become significant in complicated and prolonged court cases.

Attorney Fees

As mentioned previously, attorney fees are difficult to estimate in general and can be wildly different based on the location and specific elements of each bankruptcy case. Basically, if it’s a complicated situation, it will take longer to resolve and will incur more fees.

You’re not required to work with an attorney, which means you can file a bankruptcy petition on your own, but that leaves you responsible for all interactions with the court. The likelihood of you being successful is much higher when you’re represented by professionals who have experience handling these matters.

The specific attorney fees in your area are on the public record—made available by the government via PACER for $0.10 per page of information—which means you can find reliable costs at a local level.

Some estimates are provided below using data outlined in the Consumer Bankruptcy Fee Study produced by the University of Maine School of Law.

If You’re Filing Chapter 7

The national mean for Chapter 7 attorney fees is $968 in no-asset cases and $1,072 in asset cases. When comparing state by state, the difference in average cost can be over 200 percent. Averages range from a low of $692 in Idaho to a high of $1,530 in Arizona.

If You’re Filing Chapter 13

The national mean for Chapter 13 attorney fees is $2,564. The difference in cost from state to state can be even greater than in Chapter 7, with an increase of over 300% from lowest to highest cost. The most affordable state is North Dakota, where the mean attorney fee is $1,560 for Chapter 13 cases, and Maine is the least affordable at $4,950.

Each court has its own limits when it comes to no-look fees (also known as “presumptively reasonable fees”). These refer to the fact that if someone’s Chapter 13 filing fees are below a set amount (like, say, $4,500), the court will consider the fees reasonable without further review.

What Can Make a Bankruptcy Filing More Expensive?

Other than the filing fees, attorney fees and court costs, there are several issues that can add to the complexity and total cost of filing for bankruptcy.

  • Non-dischargeable debts, such as the majority of owed taxes, debt incurred due to deliberate injury or damage to people or property, child support, alimony and debts that were not disclosed in bankruptcy filing. These are debts that can’t be removed (discharged) via the bankruptcy process
  • Higher-than-average income based on your state and the number of people in the household
  • Previous bankruptcy filings within the last seven or 10 years that appear on your credit report
  • Multiple current filings, such as an ongoing personal bankruptcy case occurring alongside a business bankruptcy
  • Complications due to income streams and/or creditors—having more creditors generally increases the amount of time needed, as does the presence of multiple and/or complex income streams
  • Ongoing fraud cases, investigations or allegations
  • Payment plans and other arrangements made between attorney and client

Is There Any Way to Reduce Costs?

Most of the costs associated with bankruptcy are either set in stone, such as the filing fees and court costs, or predetermined by your specific situation and unable to be changed. However, there are a few circumstances that may help lower your costs.

Anyone over the age of 65 and people with disabilities, as well as the unemployed and those on a low income, may qualify for help at the local level via city and county programs. They may also receive lower fee agreements and more favorable terms on payment plans from individual attorneys.

Options such as this are dependent on location and whether the attorney in question is willing to accept it.

Theoretically, the biggest cost-saver would be to represent yourself, which would remove the attorney fees and keep your total costs fairly low. However, in reality, representing yourself in a bankruptcy or any other case is risky and can create higher costs and headaches that would’ve been avoided by paying for professional help.

The Bottom Line

As detailed above, the costs associated with Chapter 7 and 13 bankruptcy cases can vary by 300% or more and are dependent on many factors that are out of your control. It could cost a few hundred dollars, or many thousands of dollars, and the cost of a typical case is somewhere around $2,500.

It’s best to consult with a professional, even when it brings additional costs at such an unfortunate time. Bankruptcy attorneys are experts in the field and can give advice on other issues, such as the differences between foreclosure and bankruptcy.

After the dust has settled in the initial process of filing and satisfying the bankruptcy process, it’s important to get back on track and rebuild your credit and become eligible for all of the benefits it can bring. The bankruptcy will appear on your credit report for up to 10 years, but it’s never too early to start improving.

Reviewed by Vince R. Mayr, an Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Vince has considerable expertise in the field of bankruptcy law. He has represented clients in more than 3,000 bankruptcy matters under chapters 7, 11, 12, and 13 of the U.S. Bankruptcy Code. Vince earned his Bachelor of Science Degree in Government from the University of Maryland. His Masters of Public Administration degree was earned from Golden Gate University School of Public Administration. His Juris Doctor was earned at Golden Gate University School of Law, San Francisco, California. Vince is licensed to practice law in Arizona, Nevada, and Colorado. He is located in the Phoenix office.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com