Filing for bankruptcy can feel like a big step—but knowing what it costs can help you decide if it’s the right move. Between court fees, attorney costs, and credit counseling, the numbers can add up quickly. But for many people, the long-term relief is worth it.
This guide breaks down exactly what you’ll pay for Chapter 7 or Chapter 13, how those costs compare to alternatives, and what to expect based on your income and debt. Whether you’re weighing your options or ready to file, here’s what you need to know.
Key Takeaways
- Filing fees for Chapter 7 and Chapter 13 range from $200 to $350, with total costs often reaching $1,500 to $5,000, depending on complexity.
- Chapter 7 offers faster debt discharge but may involve losing property, while Chapter 13 provides a repayment plan that allows you to retain assets.
- Alternatives to bankruptcy, like debt management plans or consolidation loans, may be more cost-effective and have less impact on your credit.
Breakdown of Bankruptcy Costs
Filing for bankruptcy comes with a few core expenses: court fees, credit counseling, and attorney fees. Knowing what to expect can help you budget and avoid surprises.
Court Filing Fees
The court charges a filing fee based on the type of bankruptcy:
- Chapter 7: $300–$350
- Chapter 13: $200–$300
These fees cover the court’s administrative costs but don’t include attorney fees or any extra paperwork.
Credit Counseling and Debtor Education
You’re required to complete a credit counseling session before filing and a debtor education course after. Each one usually costs $20 to $50, though some providers offer reduced or waived fees based on income.
Attorney Fees
Most people hire an attorney to handle paperwork, court filings, and hearings. Here’s what you can expect:
- Chapter 7: $1,000–$2,000
- Chapter 13: $2,500–$5,000
Attorney fees depend on where you live, how complex your case is, and how experienced your lawyer is. Most charge a flat fee that covers the entire process from start to finish.
Cost Comparison Table
| Expense Type | Chapter 7 | Chapter 13 |
|---|---|---|
| Filing Fee | $300–$350 | $200–$300 |
| Attorney Fees | $1,000–$2,000 | $2,500–$5,000 |
| Credit Counseling/Debtor Education | $20–$50 each | $20–$50 each |
| Total Estimated Cost | $1,500–$3,500 | $3,000–$5,500 |
Chapter 7 vs. Chapter 13: How Each One Works
The two main types of consumer bankruptcy—Chapter 7 and Chapter 13—offer different approaches to handling debt. Choosing the right one depends on your income, assets, and goals.
Chapter 7 Bankruptcy
Chapter 7 is best for people with low income and few assets. It wipes out most unsecured debts in a matter of months. In return, you may have to give up non-essential property like a second vehicle or investment assets. Essentials like your home, car, and household goods are often protected by state exemptions.
Chapter 13 Bankruptcy
Chapter 13 is designed for those with steady income who want to keep their property. You’ll make regular payments toward your debt over three to five years under a court-approved plan. This option can help you catch up on missed mortgage or car payments without losing those assets.
See also: Should I File Bankruptcy?
Who qualifies for bankruptcy?
Your eligibility for Chapter 7 or Chapter 13 depends on your income, expenses, and overall financial situation. The key tool for determining this is the means test—a formula used to see if you have enough disposable income to repay your debts.
What the Means Test Looks At
The means test compares your income to the median income in your state for a household of your size.
- If you’re below the median, you’ll likely qualify for Chapter 7, which wipes out unsecured debts with no repayment plan.
- If you’re above the median, you may still qualify for Chapter 7 if your disposable income is low enough. If not, you’ll need to file under Chapter 13 and follow a court-approved repayment plan.
What Counts as Income
The test looks at all sources of income—wages, side jobs, rental income, alimony, and more. It then subtracts allowable living expenses like housing, food, insurance, and medical costs to calculate what you can reasonably afford to repay.
How It Impacts Your Costs
- Chapter 7 usually costs less overall but may involve giving up some non-essential property.
- Chapter 13 comes with higher attorney fees and a longer process but lets you keep your assets as long as you stick to the plan.
Taking the means test is a required step before filing, and it sets the path for how your case will move forward.
Other Costs You Should Know About
Bankruptcy can come with long-term consequences beyond filing fees and attorney costs. These include potential property loss, credit damage, and emotional stress—each with its own impact on your financial future.
Loss of Property
In Chapter 7, non-exempt assets like a second vehicle, collectibles, or investment property may be sold to pay creditors. Essentials—such as your primary residence, car, or household goods—are often protected by state exemption laws. In Chapter 13, you can typically keep your property as long as you follow the repayment plan.
Credit Score and Borrowing Limits
Bankruptcy will lower your credit score and stay on your credit report for up to 10 years (Chapter 7) or seven years (Chapter 13). During that time, qualifying for loans or credit cards may be harder and come with higher interest rates. That said, rebuilding your credit after bankruptcy is possible with on-time payments and responsible use of credit.
Emotional and Mental Stress
The bankruptcy process can feel stressful, especially if you’re worried about losing assets or dealing with legal steps. If you’re feeling overwhelmed, talk to a financial counselor or someone you trust. Bankruptcy is a reset—not a failure—and can be the first step toward regaining financial control.
Alternatives That Could Cost Less Than Bankruptcy
Before resorting to bankruptcy, it’s worth exploring other debt relief options that may be more suitable for your needs:
Debt Management Plans
A debt management plan (DMP) is a structured repayment plan negotiated with your creditors by a credit counseling agency. DMPs typically involve lower interest rates and waived fees, allowing you to pay off your debts over a specified period, usually three to five years.
Debt Settlement
Working with a debt settlement company involves negotiating with your creditors to accept a lump-sum payment that is less than the total amount you owe. This option can negatively impact your credit score, as it typically requires you to stop making payments on your debts while negotiations take place. However, it may allow you to resolve your debt without going through the bankruptcy process.
DIY Debt Negotiation
If you’re confident in your negotiation skills, you may attempt to negotiate directly with your creditors to lower your interest rates, waive fees, or accept a reduced lump-sum payment. This option can be challenging and time-consuming, but it may help you avoid bankruptcy and minimize the impact on your credit score.
Debt Consolidation Loans
A debt consolidation loan allows you to combine multiple debts into a single loan, often with a lower interest rate and more manageable monthly payments. This option may be suitable for those with good credit who can secure favorable loan terms, but it does not eliminate your debt and may require collateral.
Factors to Consider When Choosing an Alternative
When evaluating alternatives to bankruptcy, consider the following factors:
- Your total debt: Some alternatives may be more suitable for smaller debt amounts, while bankruptcy may be more appropriate for larger debts.
- Your ability to repay: If you have a steady income and can afford to repay your debts over time, a DMP or Chapter 13 bankruptcy might be a better option than Chapter 7.
- Your credit score: Bankruptcy can significantly damage your credit score, so alternatives that have a less severe impact on your credit may be more appealing.
Bottom Line
Bankruptcy isn’t cheap—but for many people, it’s worth it. The upfront costs can feel steep, but they often pale in comparison to the long-term pressure of unpaid debt, lawsuits, or wage garnishment. If you’re buried in bills with no clear way out, bankruptcy may be the cleanest path forward.
Chapter 7 can give you fast relief, but it may come with trade-offs like losing non-essential property. Chapter 13 takes longer and costs more, but it lets you keep what you own while you catch up on payments. And if neither option feels right, there are other ways to get back on track—like debt management plans or consolidation loans.
Take your time, weigh your options, and don’t be afraid to ask for help. A qualified bankruptcy attorney or financial counselor can walk you through next steps and help you figure out what makes the most sense for your situation.
Frequently Asked Questions
Can I make payments on my bankruptcy filing fees?
Yes. If you can’t afford the full filing fee upfront, the court may let you pay in installments. You’ll need to request a payment plan when you file your case. In some situations, you may also qualify for a fee waiver based on your income.
Will bankruptcy stop wage garnishments and collection calls?
Yes, once you file for bankruptcy, an automatic stay goes into effect, which halts all collection actions, including wage garnishments and collection calls.
Do I have to go to court if I file for bankruptcy?
Yes, but it’s usually just one short meeting called the 341 meeting or “meeting of creditors.” It’s not a courtroom hearing. You’ll answer questions from the bankruptcy trustee under oath, and creditors may attend but often don’t.
Will I lose my tax refund if I file for bankruptcy?
Possibly. In Chapter 7, your tax refund may be considered part of the bankruptcy estate and used to repay creditors—especially if you haven’t received it yet. In Chapter 13, it may be factored into your repayment plan. Some states allow exemptions that can protect your refund.
Can I file for bankruptcy more than once?
Yes, it’s possible to file for bankruptcy more than once, but the rules and eligibility requirements can be more stringent if you’ve already received a bankruptcy discharge in the past.
