How Much Do You Pay Into Bankruptcy
The costs of bankruptcy depend entirely on which chapter you file. Chapter 7 involves upfront fees then nothing afterward. Chapter 13 requires years of monthly payments that can total tens of thousands of dollars over the plan period.
People always ask what bankruptcy costs. The real question is what you get for that money—and whether the investment makes financial sense.
Here's a complete breakdown of every dollar involved in the bankruptcy process.
Complete Bankruptcy Cost Breakdown
| Cost Category | Chapter 7 | Chapter 13 |
|---|---|---|
| Court Filing Fee | $338 | $313 |
| Attorney Fees | $1,500 - $3,000 | $3,000 - $6,000 |
| Credit Counseling Course | $25 - $50 | $25 - $50 |
| Debtor Education Course | $25 - $50 | $25 - $50 |
| Monthly Plan Payments | None | $200 - $2,000+ |
| Total Plan Payments | None | $7,200 - $120,000+ |
Chapter 7 Costs: Pay Once and Done
Chapter 7 is the straightforward liquidation bankruptcy. You pay upfront costs, attend one meeting, and receive your discharge roughly three to four months later. No ongoing payments. No trustee supervision for years. Just the fresh start.
The court filing fee is currently $338, set by federal statute. This doesn't vary by state or attorney. If you genuinely cannot afford it, you can request a fee waiver or pay in installments over 120 days.
Attorney fees for Chapter 7 range from $1,500 to $3,000 in most markets. Complex cases or high-cost cities run higher. Some attorneys offer payment plans where you pay half before filing and half within 60 days after. A few require full payment upfront.
Expert insight: "Never pay Chapter 7 attorney fees on a credit card. That debt becomes non-dischargeable because you knew bankruptcy was imminent when you incurred it."
Required Courses Add Nominal Costs
Federal law requires two educational courses. Pre-filing credit counseling takes about an hour and covers budgeting basics plus bankruptcy alternatives. Post-filing debtor education runs about two hours and focuses on financial management skills.
Both courses cost between $25 and $50 each when taken online. In-person options exist but cost more. You must complete them with approved providers listed on the U.S. Trustee's website.
Chapter 13 Costs: The Long-Term Commitment
Chapter 13 works completely differently. Instead of liquidating assets, you propose a repayment plan lasting three to five years. Monthly payments go to a trustee who distributes funds to creditors according to your court-approved plan.
Attorney fees for Chapter 13 run $3,000 to $6,000 in most markets. The good news: most gets paid through your plan rather than upfront. You might pay $500 to $1,000 initially, with the rest coming from monthly plan payments over time.
The court filing fee is $313 for Chapter 13. Combined with the same credit counseling requirements as Chapter 7, your upfront out-of-pocket before filing might be $800 to $1,500 total.
Chapter 13 Payment Scenarios
| Payment Scenario | Monthly | 36 Months | 60 Months |
|---|---|---|---|
| Low income, modest debt | $200 | $7,200 | $12,000 |
| Median income, average debt | $500 | $18,000 | $30,000 |
| Above median, high debt | $1,000 | $36,000 | $60,000 |
| High income, significant debt | $2,000 | $72,000 | $120,000 |
What Your Plan Payments Cover
That monthly check to the trustee gets divided multiple ways. Priority debts like recent taxes and child support arrears must be paid 100%. Attorney fees come from the pot. Administrative costs and trustee commissions take a slice. Secured debt arrears need coverage. Whatever remains goes to unsecured creditors.
Here's what surprises many people: unsecured creditors often receive very little in Chapter 13 cases. After priority debts, secured arrears, and administrative costs, there might be pennies on the dollar left for credit cards and medical bills. The plan still gets approved because it pays what you can afford.
Expert insight: "Your Chapter 13 payment can decrease if income drops. File a plan modification with documentation of changed circumstances."
The Trustee's Cut
Chapter 13 trustees charge fees based on plan payments—typically around 10% of disbursements. This comes from your payments, not in addition. If you pay $500 monthly, roughly $50 goes to trustee fees.
Hidden Costs Nobody Mentions
The dollar amounts above represent direct costs. Indirect costs add up too. Taking time off work for the 341 meeting costs wages. Gathering documents takes hours you could spend doing something else. The stress affects productivity and wellbeing.
Credit score damage creates ongoing costs. Higher interest rates on future car loans, credit cards, and potentially mortgages mean paying more for the same products. Someone with a 700 credit score gets a 6% car loan. Someone with a 550 score pays 15% or can't get approved.
What You Get For Your Money
Let's flip the question. Instead of asking what bankruptcy costs, ask what you receive. Chapter 7 for $2,000 in total costs might eliminate $50,000 in debt. That's a 96% discount on financial obligations. No investment produces returns like that.
Chapter 13 costs more but delivers more too. You keep your house by catching up mortgage arrears over the plan period. You keep your car while paying off the loan. You might reduce principal on certain secured debts. Interest stops accruing on unsecured debts for the entire plan.
Paying For Bankruptcy When You're Broke
The irony isn't lost on anyone: bankruptcy costs money when you have none. Attorneys understand this and most work with clients on payment arrangements.
Many Chapter 7 attorneys accept payments over two to four months before filing. You accumulate the total fee, then they file once fully paid. This requires patience while creditors continue calling, but it's how most people manage.
Fee Waivers and Pro Bono Options
If income falls below 150% of the poverty level, you can apply to have the court filing fee waived entirely. The application requires proof of income and expenses. Approval isn't automatic but happens regularly.
Legal aid organizations provide free bankruptcy services in many communities. Waitlists exist, and they prioritize cases involving foreclosure or other urgency. Law school clinics offer another option—supervised students handle straightforward Chapter 7 cases.
Frequently Asked Questions
Can I pay bankruptcy attorney fees with a credit card?
Strongly advised against—debts incurred anticipating bankruptcy may be challenged as fraudulent.
Are bankruptcy costs tax deductible?
Generally no for personal bankruptcy, though business bankruptcies may have different treatment.
What happens if I can't complete Chapter 13 payments?
Your case may be dismissed or converted to Chapter 7, depending on circumstances.
Do I pay creditors directly during Chapter 13?
No—all payments go through the trustee who distributes funds according to your plan.
Can Chapter 13 payments change during the plan?
Yes—payments can increase or decrease based on documented income changes.
Is hiring a lawyer required?
No, but pro se filings have much higher dismissal rates and mistakes can cost more than attorney fees.
Updated 2025-01-07