How much does it cost to file bankruptcy?

How much it cost to file bankruptcy depends first on which type of bankruptcy - Chapter 7 or Chapter 13. Some of the costs are present for both types. Let's start with a Chapter 7 Bankruptcy:

Chapter 7 Bankruptcy Costs

The first expense is the filing fee that goes to the Court when you file your Bankruptcy Petition. This is currently set at $338 for a Chapter 7 Bankruptcy.

Before you can file bankruptcy, you are required to attend/watch a credit counseling course. There are several approved companies wh

o offer this course and the prices vary slightly but most courses are in the $25-50 range.

Most attorneys will obtain a copy of your credit report before filing to ensure you have all of your creditors listed in your bankruptcy petition. There are free websites such as Credit Karma where you can obtain your report. You can also get 1 free report per year from each of the three credit agencies from www.annualcreditreport.com. However, your attorney may use a paid service that will get your credit report. Depending on which option your attorney uses, this cost could be around $40-50.

Before you bankruptcy is discharged, you also have to obtain a certificate for a financial management course. There a many companies to choose from but most range from $25-50.

The largest expense is the attorney fee. This varies greatly based on your location. In Alabama, this fee is often around $800-1500 depending on your city and jurisdiction. If your case is very complex or involves a business, this fee can be substantially higher.

After all the fees, a Chapter 7 usually ranges from $1,300-2,250 in our region.

Chapter 13 Bankruptcy Costs

In a Chapter 13 Bankruptcy, the court filing fee is $313. However, you can opt to pay this expense "through the plan" which is your Chapter 13 payment plan. In other words, you may not have to come out of pocket upfront for this expense.

You are still required to obtain a credit counseling certificate in a Chapter 13. This usually costs anywhere from $25-50.

You may also still get a paid credit report which could cost $40-50.

Attorneys are paid after a Chapter 13 Plan gets approved by the Court and Trustee. You typically do not pay your Chapter 13 attorney upfront. However, sometimes they may require a small fee depending on how their office handles expenses and their time to prepare the Bankruptcy petition. This could cost you anywhere from $0-$350 is usually the norm.

The total cost needed to file a Chapter 13 Bankruptcy could be as low as $100 which is why you often see advertisements for $0 down Chapter 13 Bankruptcies. This is because the filing fee and attorney fee is paid through your monthly consolidation payment and not out of pocket separately. Also, if your case does not get approved for any reason, some of the fees are never paid.

If you have any questions, contact us at the Britt Law Firm at 256-349-9071.