How much does it cost to file for bankruptcy?
Bankruptcy can help you get a new financial start if you can no longer pay your creditors. This legal process will allow you to liquidate assets and pay your debts through a repayment plan. When you file for bankruptcy, you must pay the filing fees and, in some cases, the costs associated with credit counseling. If you cannot afford to pay the filing fee, you may be able to qualify for installment payments or even for a waiver of the total fee. Here is an overview of the process and a breakdown of all the related costs of the most common bankruptcy proceedings:
Bankruptcy Filing Fees
The bankruptcy court increases these fees from time to time. As of June 1, 2016, the fees required to file for bankruptcy are:
- Chapter 7 bankruptcy: $335
- Chapter 12 bankruptcy: $275
- Chapter 13 bankruptcy: $310
Fee Waivers and Installment Payments
You will need to pay the filing fee when you file a petition, but there are two exceptions. You can make a request to the court to pay your fee by installments, or request that the court waive the fee altogether.
Filing Fee Installment Form
You can request that the court let you pay your filing fee in smaller increments over time. To apply to pay the fee by installment plan, file Form 3A, which is an application plus an order to pay filing fees in installment payments. On the application, you must say that you cannot remit payment except in installments and then suggest a plan for repayment of the complete fee. Your stated payment plan cannot be more than four installments, and the last amount cannot be more than 120 days after filing the request.
Requesting a Fee Waiver
If you qualify, you can request that the court waive your filing fees. In order to qualify, you must not be able to pay the installments, and your income has to fall below 150% of the poverty line.
To take advantage of this qualification, you will need to fill out Form 3B, which is an application asking for the waiver of the Chapter 7 filing fee. In addition, you will need to appear in court so that the judge can ask you a few questions related to your bankruptcy situation.
Chapter 13 Fee Waiver and Payment Plans
Since you must possess adequate capital to fund an installment plan for three to five years in cases of Chapter 13 bankruptcy, Chapter 13 filers will seldom qualify for a waiver of their fee. In addition, Chapter 13 filers cannot make further payments to their lawyer until that individual fully pays the related filing charge, which means that Chapter 13 filers will seldom have the capability to make payments on an installment plan because their lawyers will typically require payment of some of their fees in advance.
If you'd like to, you can file for bankruptcy "pro se" (without an attorney). However, success rates are typically higher when attorneys are used. For a Chapter 7 bankruptcy, attorney fees average $1,250. For a Chapter 13 bankruptcy, attorney fees average $3,000. These figures are based on national averages. However, prices can vary from region to region.
Other Costs Related to Bankruptcy Filings
When you file for Chapter 7 or Chapter 13 bankruptcy, you must get credit counseling from an authorized provider within six months before your filing. You must also take a personal financial management course prior to getting your bankruptcy dismissed.
Many certified credit counseling services charge between $20 and $50 for the required counseling sessions, but some do not charge anything. The law requires that agencies provide counseling regardless of an ability to pay; if you cannot afford the counseling, warn the agency about this condition in advance.
Mandatory Final Certification
Before a discharge in Chapter 7 or Chapter 13 bankruptcy is allowed, you will need to complete a debtor education course and file the related certificate proving that you complied with this requirement. The certificate is termed Certification About a Financial Management Course. The cost of this course is approximately $50. Again, if you are unable to pay the fee, you can request that it be waived, or ask that the charges be dismissed.