It may seem unfair to pay money when filing bankruptcy. After all, you’re already in a rough financial situation. But, it’s crucial to understand that it’s a systematic legal process designed to reduce, restructure, or eliminate your debt. Unfortunately, there is no straightforward answer to how much it costs to file bankruptcy. Though the court filing fees are fixed, the overall cost may vary depending on how much your attorney charges, where you reside, and how complex your case is.

Let us try to understand how much filing for bankruptcy will cost you approximately.

Types of bankruptcy
It’s important to know that there are two types of bankruptcy: Chapter 7 and Chapter 13. The primary factor that dictates the cost of bankruptcy is the type of bankruptcy you choose to file. So, let’s briefly discuss these two types of bankruptcy.

• Chapter 7
  Chapter 7, also referred to as liquidation bankruptcy, involves selling some or all of your property to repay your creditors. It’s usually a good option when you don’t own a property and have a limited income.

• Chapter 13
  This is also known as a reorganization bankruptcy. With Chapter 13, you get to keep your assets like home and car, but you need to propose a repayment plan to pay off all your debts in installments over a period of three to five years.

Filing fee and other costs
Whether you file for Chapter 7 or Chapter 13 bankruptcy, your case will be heard in the bankruptcy court only after you pay specific fees. These may include:

• Filing fee
  You will be required to pay $338 to the bankruptcy court to file for a Chapter 7 case. On the other hand, the filing fees for a Chapter 13 case is $313.

• Credit counseling fee
  Before filing for bankruptcy, you are required to complete an education course called credit counseling. According to the Federal Trade Commission (FTC), most credit counseling agencies charge around $50 for the course. However, some agencies may charge as low as $15 to $20.

• Debt education course
  The bankruptcy code requires that petitioners take a debt education course after filing for bankruptcy. According to the FTC, the course may cost between $50 and $100, but those who can’t afford may be able to complete the course by paying a minimal amount.
• Attorney fees
  Most people prefer hiring an attorney. That’s because bankruptcy laws are complicated, and you could end up losing income or assets if not careful. However, keep in mind that the bankruptcy cost can increase if you get an attorney.
  It’s vital to point out that attorneys’ fees tend to differ from one case to another. If the case is complex and requires more of their time, they will charge higher fees. Additionally, the market rate based on your location will also govern how much you need to pay. Another key factor that dictates attorneys’ fees is the Chapter of bankruptcy. Experts say that attorneys charge anywhere from $500 to $3500 for a Chapter 7 case and between $1500 and $6000 for a Chapter 13 case.

No matter how complex the case is, attorneys typically don’t charge exorbitant fees. That’s because many courts have established a “no look” level. If fees cross a certain threshold, bankruptcy judges have the right to review attorney costs and make sure they charge you reasonably based on the details of your case. Bankruptcy attorneys typically offer free consultation, during which you can get an idea of how much they will cost to represent you.