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Average Cost of Filing Bankruptcy

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For many Americans struggling under a serious debt load, personal bankruptcy can offer significant and lasting debt relief. And, because bankruptcy is a major financial decision, it’s important to consider all aspects of it – including the costs of filing bankruptcy.

Even if you do all of the paperwork yourself you still must pay the courts bankruptcy filing fees, which change depending on which chapter of bankruptcy you file. If you enlist the help of a bankruptcy lawyer you will also need to pay the lawyer fees. However, many people see this cost as an investment. Because so much is at stake with your filing, many people want to get it exactly right and take full advantage of the help offered.

How much would filing bankruptcy save you? And how much of your debt could it clear? You can get answers at no cost when you complete the form on this page. We'll connect you with a local bankruptcy lawyer who can provide a free case evaluation for you.

The Costs of Personal Bankruptcy

As you may already know, there are two major types of personal bankruptcy, Chapter 13 and Chapter 7. Here’s a look at how each one works and what each one costs to file under U.S. Bankruptcy laws as of November 2011. Please remember that these costs DO NOT include attorney fees.

  • Chapter 13 bankruptcy ($281): Chapter 13 bankruptcy offers debtors a chance to catch up on past-due payments on things like home mortgages and car loans by creating a 3-5 year repayment plan. During the course of those years, Chapter 13 filers make regular monthly payments, which are distributed among their various creditors by the courts. Chapter 13 tends to work well for people who have a steady source of income and want to secure their home, cars and other valuable property.
  • Chapter 7 bankruptcy ($306): Chapter 7 bankruptcy works by granting filers a complete discharge of unsecured debt, which includes credit cards, medical bills and personal loans. In other words, if you choose to file under Chapter 7, all debts included would be wiped clean - without making any additional payments or lump sum settlements. This type of bankruptcy is intended for people who just don't have enough income to pay down their debts. While Chapter 13 cases last for several years, Chapter 7 cases can end in as little as four to six months.

Other Costs Associated with Filing for Bankruptcy

The fees mentioned above are those charged by the federal government to simply file the paperwork that begins your case. But some bankruptcy cases will have other expenses, too, possibly including some of these:

  • Lawyer’s fees: Because of the complex nature of bankruptcy law, many people enlist the help of a local bankruptcy lawyer. While this will likely mean paying lawyer’s fees (which will vary depending on the specifics of your case and where you live), working with an attorney may save you the time and frustration of potentially having your case dismissed for missing a deadline or incorrectly filling out a form.
  • Conversion fees: In some instances, a filer might decide to convert from one type of bankruptcy to the other (generally, filers convert from Chapter 13 to Chapter 7). This could result from a change in financial circumstances, and is perfectly legal, but requires the filer to pay a small fee.
  • Credit counseling and debtor education fees: As part of the bankruptcy law that became effective in 2005 (the Bankruptcy Abuse Prevention and Consumer Protection Act), all filers must complete a credit counseling briefing before filing their case with the court and a debtor education course before receiving their discharge. Luckily, each of these is available at a relatively low cost online.

Is Bankruptcy Right for You? Ask a Lawyer Today.

If you want more answers about how much a bankruptcy filing may cost, get the facts during a FREE case evaluation with a local bankruptcy lawyer. Simply complete the form on this page and we'll connect you right away.

Laws may have changed since our last update. This is for informational purposes only and is not legal advice. For legal advice on your particular situation, talk to a local attorney.


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