A lot of thought and planning goes into filing for bankruptcy. The cost and fees of filing is not something to overlook. This article takes an in-depth look at the 2017 filing rates.

Bankruptcy is becoming much less taboo in today’s society. It is no secret that many middle class Americans face financial hardship. In fact, nearly half of this cohort would be hard-pressed to come up with $400 in an emergency.

These struggles, often coupled with mounting levels of debt, lead many to consider filing for bankruptcy. The cost to file bankruptcy, however, can be a deterrent for those who are already struggling financially.

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While the decision whether to claim bankruptcy is one that should not be taken lightly and should be discussed with professionals, the pros and cons of filing for bankruptcy is beyond the scope of this article.

Instead, this article provides a detailed examination of the necessary costs of filing bankruptcy, complete with comparative tables.

If you or a loved one are wondering how much does it cost to file bankruptcy, keep reading.


How Are Bankruptcy Filing Fees Determined?

Bankruptcy in America is governed by the Constitution of the United States under Article 1, Section 8, Clause 4. This means that Congress is authorized to enact laws uniformly across the country. Most recently, Congress exercised this authority in the codification of the Bankruptcy Reform Act of 1978, also referred to as the Bankruptcy Code.

Cases of bankruptcy are then filed in the United States Bankruptcy Court, which works from a Schedule of Bankruptcy Fees that applies nationwide. In turn, this will help you determine the cost of bankruptcy.

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How Much Does It Cost to File for Bankruptcy?

Seeking an answer to the question “how much does bankruptcy cost?” is understandable if you are considering or have decided to declare bankruptcy. After all, the decision overwhelmingly takes place when money is extremely tight, making the bankruptcy cost a legitimate concern.

While it may seem to add insult to injury, a bankruptcy filing fee is required in the United States. The fee covers the services that are provided by the clerks at bankruptcy courts. However, the question of how much does bankruptcy cost is not a simple one to answer.

Instead, it depends on a debtor’s specific financial situation. Some of the most common bankruptcy filing situations, as well as the corresponding bankruptcy costs, are outlined below.

Chapter 7 Bankruptcy Cost and Fees

Chapter 7 is referred to as the liquidation chapter. It is used by individuals, partnerships, or corporations who are in dire financial situations and have no chance of repairing it. In such cases, the estate of the debtor is liquidated according to the Bankruptcy Code.

This means that a trustee sells the debtor’s non-exempt property for cash. The cash is then distributed to the creditors who are owed by the debtor.

The bankruptcy filing fee for a Chapter 7 petition is $335. This includes a $245 filing fee, a $75 administrative fee, and a $15 trustee surcharge fee. The bankruptcy cost under Chapter 7 is low compared to other chapters.

Chapter 9 Bankruptcy Cost and Fees

Chapter 9 of the Bankruptcy Code is reserved for municipalities, including cities, towns, villages, counties, taxing districts, municipalities, and school districts. According to United States courts, the purpose of municipal bankruptcy under Chapter 9 is:

“to provide a financially distressed municipality protection from its creditors while it develops and negotiates a plan for adjusting its debts. Reorganization of the debts of a municipality is typically accomplished either by extending debt maturities, reducing the amount of principal or interest, or refinancing the debt by obtaining a new loan.”

Municipalities must pay $1,717 in bankruptcy filing fees, which includes a $1,167 filing fee and a $550 administrative fee.

Chapter 11 Bankruptcy Cost and Fees

Chapter 11, also referred to as the reorganization chapter, lets individuals, partnerships, and corporations reorganize instead of liquidating their assets. According to the United States Bankruptcy Court, District of Nevada:

“In filing a Chapter 11, the debtor presents a plan to creditors which, if accepted by the creditors and approved by the Court, will allow the debtor to reorganize personal, financial or business affairs and again become a financially productive individual or business.”

The bankruptcy fees for filing under Chapter 11 amount to $1,717, including a filing fee of $1,167 and an administrative fee of $550, making the cost of filing bankruptcy this way quite high for individuals.

Chapter 12 Bankruptcy Cost and Fees

If you are a family farmer or a family fisherman, you will file under Chapter 12, which is limited to these two cohorts. Instead of liquidation, Chapter 12 allows family fishermen and family farmers with regular annual income, but who find themselves in a situation of financial distress, to devise a plan to repay their debts to creditors in installments over a period of three to five years.

The plan must be approved by the Bankruptcy Court, after which time debtors are protected, and the payment plan begins.

Chapter 12 is included in the bankruptcy code because it recognizes the unique—and sometimes difficult—economic situations of family farmers and family fishermen. As such, it removes most of the difficulties that debtors in these professions would be faced with if they were forced to claim bankruptcy under Chapter 11 or Chapter 13. For example, United States Courts claims that “Chapter 12 is more streamlined, less complicated, and less expensive than Chapter 11, which is better suited to large corporate reorganizations.”

Additionally, due to the nature of their professions, family farmers and family fishermen typically face larger debts than the average wage earner, making Chapter 13 unsuitable for this cohort as well.

Family farmers and family fishermen can expect to pay a total of $275 in bankruptcy fees, including a $200 filing fee and a $75 administrative fee. The cost of bankruptcy is relatively reasonable under Chapter 12.

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Chapter 13 Bankruptcy Cost and Fees

Individuals with regular income but who face large debt may file for bankruptcy under Chapter 13 of the Bankruptcy Code. Chapter 13 allows filers to repay their debts within a reasonable period of time. Therefore, a plan is devised by which debtors must agree to pay a decided percentage of all future income to creditors via the Bankruptcy Court. The Court will protect debtors following the approval of such plans.

So, how much does it cost to file bankruptcy under Chapter 13? The cost of bankruptcy of this type is $310. This amount covers a $235 filing fee and a $75 administrative fee.

Chapter 15 Bankruptcy Cost and Fees

When parties involved in a bankruptcy filing are from two (or more) different countries, the case is filed under Chapter 15. Like Chapter 11, the bankruptcy filing fees under Chapter 15 total $1,717. A $1,167 filing fee and a $550 administrative fee are covered by this total cost.

The above fees are summarized in table 1 for comparison.


Average Bankruptcy Cost and Fees | 2017

Bankruptcy Type Cost & Fees Administrative Fees + Surcharge Total Bankruptcy Cost
Chapter 7 $245 $90 $335
Chapter 9 $1,167 $550 $1,717
Chapter 11 $1,167 $550 $1,717
Chapter 12 $200 $75 $275
Chapter 13 $235 $75 $310
Chapter 15 $1,167 $550 $1,717

Table 1: Bankruptcy cost and filing fees

The good news? If you can demonstrate that bankruptcy filing fees would cause significant financial hardship if paid up front in one lump sum, most courts will allow you pay in installments instead.

For example, table 2 is recreated from data provided by the United States Bankruptcy Court, District of Nevada. It outlines the fee installments that can be paid by individuals only, not partnerships and corporations. Spreading your bankruptcy costs in this way can make them more manageable.

Chapter 7
1st installment due within 2 business days upon filing of petition

$80

2nd installment due within 60 days of filing the petition

$80

3rd installment due within 90 days of filing the petition

$80

4th installment due no later than 120 days of filing the petition

$95

Chapter 11
1st installment due within 2 business days upon filing of petition

$400

2nd installment due within 60 days of filing the petition

$400

3rd installment due within 90 days of filing the petition

$400

4th installment due no later than 120 days of filing the petition

$517

Chapter 12
1st installment due within 2 business days upon filing of petition

$50

2nd installment due within 60 days of filing the petition

$50

3rd installment due within 90 days of filing the petition

$75

4th installment due no later than 120 days of filing the petition

$100

Chapter 13
1st installment due within 2 business days upon filing of petition

$80

2nd installment due within 60 days of filing the petition

$80

3rd installment due within 90 days of filing the petition

$80

4th installment due no later than 120 days of filing the petition

$70

Table 2: Petition fee installments for individuals

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Other Bankruptcy Fees

In addition to the bankruptcy filing fees and administrative fees necessary under chapters 7, 9, 11, 12, 13, and 15, there are numerous other fees identified in the Schedule of Bankruptcy Fees. Depending on your needs, the total cost to file bankruptcy can be very expensive. While some costs are quite low, such as the $0.65 cost per page for the retrieval of a copy of electronic records from the Federal Record Center, other charges are pricier. For example, an adversary filing costs $350 while an authorized direct appeal costs $207.

Additional common costs to file bankruptcy are outlined in table 3 below.

Type of Document Fee

Motions

Abandonment of property $176
Lift Automatic Stay $176
For the sale of property free and clear of liens $176
Withdrawal of Reference $176

Copy Requests

Per page $0.50
Per page for items printed from the public access terminals $0.10

Miscellaneous Fees

Certification of a document $11 (plus the copy fee)
Exemplification of a document $21
Registration of judgment from another district $46
Retrieval of case from national archives $64

Appeals

Appeals $298
Direct appeal requesting/Cross appeal requesting $298
Direct appeal authorized/Cross appeal authorized $157

Table 3: Common documents types and corresponding fees associated with filing bankruptcy

You can access the full Schedule of Bankruptcy Fees to get a better sense of the cost to file bankruptcy here. Doing so will help you better answer the question of how much does it cost to file bankruptcy.

Moreover, the cost to file bankruptcy increases due to a credit counseling and a personal financial management course that you will be required to take upon filing for bankruptcy. Depending on your location, this can cost between $50 and $100.

This guidance will likely be beneficial and could help you save money in the long run. For example, by learning sound financial management strategies, you are more apt to save on interest rates and payments and set yourself up for a more secure future when it comes to money. However, there is no denying that these requirements add to the overall bankruptcy cost that you will have to pay up front.

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Bankruptcy Attorney Fees

Throwing a bankruptcy attorney into the mix will significantly increase your bankruptcy cost. In fact, attorney fees comprise the largest chunk of bankruptcy fees.

While you are not required to be represented by a bankruptcy attorney, your chances of success are significantly higher. For example, the National Bankruptcy Forum indicates that attorneys have more than a 95% success rate in Chapter 7 cases in Los Angeles, compared to a success rate of only 60% in pro se cases.bankruptcy cost-min

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Similarly, when attorneys are enlisted in Chapter 13 cases in Los Angeles, they are able to be successful in 55% of cases.

This may not seem like a lot, but consider that pro se cases are successful just 0.04% of the time. That is only 1 in 2,500, making your chances of success if you choose to tackle a Chapter 13 case alone slim to none. In such cases, adding extra bankruptcy costs in the form of an attorney can be worth it.

So, the question of how much to file bankruptcy in terms of an attorney is important. Again, there is no hard and fast answer because attorney fees vary greatly. However, the National Bankruptcy Forum has compiled averages that will be useful in your decision as to whether to hire a bankruptcy attorney.

For example, the average bankruptcy cost in the United States when it comes to attorneys is an up-front fee of $1,250. Keep in mind, however, that this number will vary—perhaps greatly—based on your location and specific financial situation. According to the forum:

“You can generally expect to pay more in a large metro area than in a small town. In addition to your location, the complexity of your case may affect your fees. If you’re filing a relatively simple “no asset” case (when you have no non-exempt assets), you’ll pay less than you would for a complex case which is more likely to result in litigation.”


Bankruptcy Attorney Fees in LA, Dallas, Miami and New York City

City Average Attorney Fee for Chapter 7 Cases
Los Angeles $1,000–$1,500
Dallas $774–$1,820
Miami $1,000–$2,000
New York City $1,000–$2,000

Table 4: Average attorney bankruptcy fees for major American cities for Chapter 7 cases.

While the filing and administrative fees for Chapter 13 cases is actually lower than the bankruptcy fees for Chapter 7 cases, your attorney fees will be higher if you choose to work with a lawyer on a Chapter 13 case. Indeed, the American average is $3,000. As previously mentioned, however, your chances of success will be astronomically higher, making it a justifiable expense.

And, like in most legal cases, you will pay more for lawyers who have more years of experience.

For debtors who are hard-pressed for cash, the decision not to use a bankruptcy attorney is understandable. While it will certainly increase your overall bankruptcy cost, your case will likely be resolved more favorably. You should weigh the pros and cons depending on your own financial situation, especially the stakes of an unsuccessful case.


Conclusion: Bankruptcy Fees, Costs and Pricing

As you can see, there is no one answer to the question: How much does it cost to file for bankruptcy? Rather, bankruptcy cost depends on a variety of factors. For one, bankruptcy filing fees depend on the type of bankruptcy you claim.

Moreover, there are associated bankruptcy fees that you may need to pay depending on your needs, such as a small cost for document retrieval or a more sufficient cost if you choose to appeal a court decision.

Lastly, whether you choose to hire an attorney to represent you may significantly increase your total cost of filing bankruptcy.

It is also likely, however, that an attorney can increase your chance of success, so it can be a justifiable cost if your financial situation allows.

Despite the variation, this article has provided an overview of common types of bankruptcy claims and the corresponding bankruptcy filing fees, which will give you a better idea of how much you can expect to pay.

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