How much does it cost to declare bankruptcy? – Forbes Advisor


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Filing for bankruptcy protection can free you from heavy debt and stubborn debt collectors, but there is a cost. Depending on the type of bankruptcy, consumers may have to pay anywhere from a few hundred to several thousand dollars to obtain debt relief under national bankruptcy laws. For businesses that choose reorganization bankruptcy, the costs can be even higher.

How much does it cost to declare bankruptcy?

The cost of bankruptcy varies greatly depending on the type, size and complexity of the case. Chapter 7 liquidation bankruptcies, which can erase many types of debt, can cost as little as filing fees, if you don’t use an attorney.

Chapter 13 bankruptcies, in which you make a deal with creditors to pay them off over time, often require a lawyer and can cost a lot more. Chapter 11 bankruptcies, commonly used by businesses, are the most expensive, with high legal costs and generally much higher legal costs.

Some bankruptcy costs are almost unavoidable. The federal courts that handle all bankruptcies charge standard fees, including administrative fees just for accepting cases. Filers may pay other court fees as a case progresses through the court process, although courts may vary or waive certain fees where financial necessity arises.

Filers can also pay fees for professional help – from lawyers, accountants or appraisers – but these costs can be avoided in some cases. For example, state legal aid societies and pro bono attorneys can provide assistance to low-income people.

Obviously, the cost of reimbursing creditors in Chapter 13 and 11 cases can also be high. But while Chapter 7 bankruptcy requires the filer to sell assets to pay debts, almost all Chapter 7 cases involve no assets – so there is no liquidation and the filer pays nothing to creditors. to pay off debts.

What are the bankruptcy filing fees?

These are the typical minimum costs that a bankruptcy filer is likely to incur.

The court fees shown in the table are the minimum fees required to file a case in a US bankruptcy court. But there are also standard court costs for many other actions that could arise in a bankruptcy case.

For example, it costs $298 to appeal a decision, $11 to have a document certified, and 50 cents per page for copies of court documents. A bankruptcy court does not accept checks or credit cards from debtors.

Attorney fees are estimates of the lowest amounts bankruptcy attorneys will charge for straightforward cases. Even within these limits, attorney fees vary widely. It’s safe to say that in any case involving legal representation, attorney fees will be the lion’s share of the cost.

What are the bankruptcy attorney’s fees?

Although court fees are standard, the cost of hiring a lawyer depends on the lawyer or law firm, and even more on the type of case and its complexity. For example, the legal costs for Chapter 11 can be considerable because these cases are much more complicated. A lawyer must prepare a reorganization plan and a payment plan, then work with the court and creditors to get those plans approved.

Attorney fees also differ by geography, with attorneys located in larger cities tending to charge more.

The typical cost for a bankruptcy attorney can range from $100 to $400 per hour. But hourly billing may not come into play with Chapter 7 and 13 bankruptcies. These can be handled on a flat rate basis or with limited hourly charges.

With Chapter 11 bankruptcy cases involving large corporations, lots of debt, and many creditors, it can take thousands of hours of work by attorneys, accountants, and others, resulting in costs measured in the millions. A seven-figure legal bill, even for a small Chapter 11 case, is probably normal.

How to pay bankruptcy: 3 options

Just as getting a bank to approve a loan can be difficult for people who really need the money, getting creditor protection through bankruptcy can be hard to afford for people who have the most. need. Bankruptcy itself contributes to the problem.

For example, attorneys handling Chapter 7 bankruptcies often require an upfront payment before filing the initial petition. The reason for this is that if the lawyer waits for payment, his fees will be paid together with the filer’s other debts as a natural consequence of bankruptcy.

Here are four strategies for dealing with the costs of bankruptcy.

1. Ask to pay in installments

Some attorneys will allow Chapter 7 clients to pay in instalments. However, the lawyers will not file the documents until all the money is in hand.

Some attorneys have attempted to charge a partial payment up front and then collect the remainder after the bankruptcy petition is filed so that the court costs are not wiped out with the other debt. But these maneuvers did not withstand legal challenges.

2. File for Chapter 13 instead of Chapter 7

Difficulty paying for a Chapter 7 liquidation bankruptcy may lead some consumers to file for Chapter 13 instead. Since Chapter 13 bankruptcy requires filers to pay off at least a portion of their debt over a period of up to five years, attorneys are willing to set up payment plans to handle Chapter 13 cases. .

3. Contact your local legal aid society

Another option for cash-strapped consumers is to contact a local legal aid company. These groups can provide advice, help fill out forms, and help filers navigate the process. If necessary, they also put clients in contact with qualified lawyers. Consumers can pay for assistance on a sliding scale based on income.

4. Go ‘Pro Se’

You do not need to hire a lawyer to declare bankruptcy. About 1 in 11 bankruptcy cases is a “pro se” case, in which you represent yourself. In particular, it is not uncommon for Chapter 7 filers to go pro se. Unfortunately, self-represented applicants are more likely to have their case rejected or not get debt relief. They end up back where they started, at the mercy of creditors demanding payment.
Bankruptcy software can help you avoid this scenario. For example, Upsolve, a non-profit organization that offers a software-based approach to self-help bankruptcy, is free and can allow users to file without any legal assistance.


It takes money to declare bankruptcy. The exact amount depends on the type of bankruptcy protection you seek, the size of your debts and assets, and the number of creditors you owe. The costs will total at least a few hundred dollars or, in the case of a business filing, potentially several thousand or even millions. Options for paying these fees are limited, especially for Chapter 7 filers. However, low-cost legal help and even free online bankruptcy filing software can help people with more debt than money.

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Frequently Asked Questions (FAQ)

What is the cheapest type of bankruptcy?

Simple Chapter 7 liquidation bankruptcy can be done by a debtor without an attorney for as little as $338 in court costs.

Will my bankruptcy attorney let me pay the legal bill in installments?

For Chapter 7, you may have to pay the full fee up front before the attorney files the petition. Chapter 13 generally allows you to file now and pay your attorney later.

Can I represent myself in the event of bankruptcy?

You can, but you’re much more likely to get the result you want if you hire an attorney who knows bankruptcy laws, policies, and practices.


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