How Much Does It Cost to File for Bankruptcy?

When you’re facing financial hardship, the idea of paying money to get out of debt can feel overwhelming. Yet understanding the costs associated with bankruptcy filing is an important part of deciding whether this path makes sense for your situation. At Biggs Law Firm, we believe in transparency about the financial commitment involved in bankruptcy, so you can make informed decisions about your future.

Understanding the Basic Filing Fees

The first cost you’ll encounter when filing for bankruptcy is the court filing fee, which is set by federal law and applies across all bankruptcy courts in the United States. For Chapter 7 bankruptcy, the filing fee is currently $338. For Chapter 13 bankruptcy, the fee is $313. Chapter 11 bankruptcy, typically used by businesses, requires a filing fee of $1,738. These fees go directly to the bankruptcy court and are separate from attorney fees or other costs.

If you’re filing Chapter 7 and your household income is less than 150% of the federal poverty guidelines, you may qualify for a fee waiver. Alternatively, the court may allow you to pay the filing fee in installments over several months. Chapter 13 filers can typically include the filing fee as part of their repayment plan, spreading the cost over time.

Attorney Fees and Why They Matter

While it’s technically possible to file for bankruptcy without an attorney, the complexity of bankruptcy law makes this approach risky for most people. Attorney fees for bankruptcy cases vary based on several factors, including the type of bankruptcy you’re filing, the complexity of your financial situation, and your location.

In North Carolina, Chapter 7 bankruptcy attorney fees typically range from $1,500 to $3,500 for straightforward cases. For Chapter 13 bankruptcy in the Eastern District of North Carolina, the court has set a base attorney fee of $6,500, though a portion of this fee can often be included in your repayment plan. Because every financial situation is unique, the actual cost of your case may vary depending on your specific circumstances and any complexities involved.

These fees reflect the substantial work involved in preparing your bankruptcy petition, which includes gathering and reviewing your financial documents, completing required financial management courses, attending court hearings with you, and communicating with creditors and the bankruptcy trustee. A knowledgeable attorney also helps you navigate challenges that arise during your case and ensures you’re taking full advantage of available exemptions to protect your property.

Credit Counseling and Debtor Education Courses

Federal bankruptcy law requires two educational components that come with their own costs. Before you can file for bankruptcy, you must complete a credit counseling course from an approved provider. After filing, you’ll need to complete a debtor education course before your debts can be discharged. These courses typically cost between $10 and $50 each, and many providers offer online options for convenience. Some approved agencies provide these courses at reduced rates or even free of charge for those who demonstrate financial hardship.

Additional Costs to Consider

Beyond the basic fees, some bankruptcy cases involve additional expenses. If you need to obtain copies of documents like tax returns or property appraisals, you may face modest copying or appraisal fees. Cases involving disputes with creditors or challenges to the discharge of specific debts might require extra legal work beyond the standard bankruptcy filing.

For business bankruptcy cases, there may be costs associated with obtaining a professional valuation of business assets, preparing detailed financial projections for a reorganization plan, or hiring an accountant to review financial records. These costs vary significantly based on your business’s size and complexity.

Weighing Costs Against Benefits

While the upfront costs of bankruptcy can feel daunting when you’re already struggling financially, it’s important to consider these expenses in context. Bankruptcy provides immediate relief from creditor harassment, stops foreclosure proceedings, and can eliminate or restructure thousands or even hundreds of thousands of dollars in debt. For many people, the cost of filing for bankruptcy is far less than continuing to struggle with minimum payments, penalty fees, and mounting interest charges.

Consider a scenario where you’re carrying $30,000 in credit card debt with high interest rates. Even if you paid $500 per month toward this debt, you might spend years paying it off while accumulating thousands more in interest. The cost of bankruptcy, while significant, represents a one-time investment in your financial freedom rather than years of ongoing financial stress.

Making Bankruptcy More Affordable

If the costs of filing for bankruptcy feel out of reach, several options may help. Many bankruptcy attorneys, including our team at Biggs Law Firm, offer payment plans that allow you to pay legal fees over time before filing your case. For Chapter 13 bankruptcy cases, a portion of attorney fees can be included in your repayment plan, reducing the amount you need to pay upfront.

Some clients find that once they make the decision to file for bankruptcy and stop making payments on dischargeable debts, they have more available funds to cover bankruptcy costs. While this strategy requires careful timing and guidance from an attorney, it can make the process more financially feasible.

Taking the Next Step

Understanding the costs of bankruptcy is just one piece of the puzzle. Every financial situation is unique, and the right solution for one person may not be ideal for another. During a consultation with our team at Biggs Law Firm, we’ll review your specific circumstances, explain the costs involved in your case, and discuss payment options that work with your budget.

We’ve helped countless North Carolina residents and business owners navigate financial challenges and move toward stability. If you’re considering bankruptcy but concerned about the costs, we invite you to reach out. Contact Biggs Law Firm at (919) 375-8040 to schedule a consultation at our Raleigh or New Bern office. Together, we’ll explore whether bankruptcy is the right choice for you and create a path forward that fits your financial reality.