How Much Does the Average Bankruptcy Cost?

One of the most frustrating aspects of considering a bankruptcy filing is undoubtedly the expense that is involved. It feels completely illogical that a person or business that is having difficulty paying existing debts would take on more by pursuing legal action, yet that is an inescapable part of the process. Bankruptcy costs include legal and court fees and mandatory education fees at the very least and depending upon the specifics of your situation there may be additional expenses. Still, the money that you are investing in the process is purchasing something extremely valuable and long-lasting: peace of mind and the ability to start over.

To give you an idea of what your bankruptcy might cost, here are a few basic numbers based on national averages – the cost for your locale may be different, but it will give you a ballpark idea of what you’re looking at.

In addition to the costs required by your local bankruptcy court, everybody who goes through either a Chapter 7 or Chapter 13 bankruptcy is required to complete two bankruptcy education courses arranged through a nonprofit credit counseling agency. These courses are overseen by the Office of the U.S. Trustee, a federal agency, and as a result, the course fees are as low as possible. Depending upon where you are based, the courses may be free or may be as much as $100, with the average program costing $50.

In addition to the filing fees, using an attorney for your bankruptcy will also mean that you will incur legal fees. Though bankruptcy costs differ depending upon where you live and how complex your case will be, the national average attorney fee for filing a Chapter 7 bankruptcy is between $1,000 and $3,00, while the average attorneys’ fees for filing a Chapter 13 bankruptcy is between $2,500 and $4,000.  Though you may consider reducing bankruptcy costs by trying to go through the process on your own, keep in mind that there is a significant statistical difference in the success rate of attorney-represented bankruptcy filings versus those in which debtors represent themselves. You may end up simply taking more time and experiencing more frustration, while still needing to hire an attorney in the long run.  For information on how we can help, contact us today.

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