Bankruptcy is challenging, both in emotional and financial terms. One question that often adds to the stress is, “How much do bankruptcy lawyers cost?” Well, for Chapter 7, the average cost is around $1,250 per case, while for Chapter 13, you can expect to pay $3,000. This article will break down the bankruptcy costs, including attorney fees. Let’s start!
In the United States, there are two main types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 is generally quicker and eliminates most of your unsecured debt, while Chapter 13 involves a payment plan to repay some or all your debt.
In some cases, you might be eligible for a fee waiver if your income falls below 150% of the poverty line for your state and household size. But, being eligible doesn’t guarantee the court will grant the waiver.
Understanding bankruptcy costs requires a look into the different types of bankruptcies. For instance, a Chapter 13 bankruptcy lawyer may charge a different fee than a Chapter 7. Here are some general insights.
Filing as an individual usually costs less compared to filing for a business bankruptcy. While Chapter 7 and Chapter 13 are the most used types of bankruptcy for individuals, there are other chapters you may encounter:
|Chapter||Who It's For||What It Does||Special Notes|
|7||Individuals||Liquidation||Quick process, no repayment|
|11||Businesses||Restructuring & repaying debts||More complicated & costly|
|12||Family farmers and fishermen||Reorganize business & personal affairs||Tailor-made for unique income & challenges|
|13||Individuals||Repayment plan||3-5 years repayment|
|15||Cross-border insolvencies||Provides a mechanism in U.S. bankruptcy court||Encourages cooperation between U.S. and foreign courts|
If you are not sure which type of bankruptcy is right for you, it is best to consult a lawyer.
Also, these are filing fees that a business must pay when initiating bankruptcy proceedings.
|Document Type||Amount ($)|
|Chapter 7 Voluntary / Involuntary||338.00|
|Chapter 11 Voluntary / Involuntary||1,738.00|
|Chapter 11 Railroad||1,571.00|
Business bankruptcies are more expensive, with the average cost being $1,738.
If you’re unable to pay the full filing fee upfront, many courts offer the option to pay in installments. You get quick protection from debt collectors as soon as you file. This immediate shield called an “automatic stay”, applies even if you haven’t paid the full fee yet.
Let’s look at the Chapter 7 bankruptcy payment plan in comparison to the other chapters.
|Chapter||1st Installment (within 5 days)||2nd Installment (within 60 days)||3rd Installment (within 90 days)||4th Installment (within 120 days)||Total ($)|
For further analysis, we will focus on how much a lawyer charges for Chapter 7 and 13. These chapters are most common for individuals and have more set fees. Others often pertain to specialized business cases, where legal fees can vary due to complexity.
|Expense Category||Chapter 7||Chapter 13|
|Fee to file||$338||$313|
|Switching fee (7 to 13 or 13 to 7)||No Charge/$25||No Charge/$25|
|Financial courses||up to $100||up to $100|
|Pro se total||$350 - $450||$320 - $430|
|Total with attorney fees||$1,600 - $3,000||$3,000 - $5,000|
Thus, the average cost of Chapter 7 bankruptcy is $2,250, and Chapter 13 is $3,500. If you are considering converting from Chapter 7 to Chapter 13, it’s free. But, converting from Chapter 13 to Chapter 7 will cost you $25.
In some cases, you may also consider engaging other specialists. For example, a debt lawyer costs $150-350 per hour.
Did you know that around 39% of Chapter 7 cases filed without a lawyer get dismissed? That means no debt relief. With an attorney, your success rate jumps to over 95%. In places like Los Angeles, twice as many people who filed on their own had their cases dismissed compared to those with lawyers.
Filing without an attorney, known as “Pro Se” demands a lot of time and stress to grasp the law, compile your paperwork, and make court appearances. When you’re already in financial difficulties, this extra burden could make things worse.
Now that you know why an attorney is worth the investment, let’s deal with the question “How much does a lawyer cost to file bankruptcy” under chapters.
A Chapter 7 bankruptcy attorney is around $1,250. This often covers filing fees, court appearances, and paperwork. In Chapter 7 cases, you must pay all attorney’s fees before filing.
Let’s look at how the costs vary by state for Chapter 7. (Note: The following table includes selected states for illustrative purposes and is not exhaustive.)
|State||How much do bankruptcy lawyers cost for Chapter 7|
|Ohio||$1,090 - $1,500|
|California||$1,200 - $1,850|
|Texas||$975 - $2,000|
|New Jersey||$1,000 - $2,800|
|Alabama||$1,170 - $1,500|
|Massachusetts||$1,150 - $2,500|
Costs for Chapter 7 attorneys appear to be consistent across different states, except for New Jersey, where costs can go up to $2,800. If you’re in Texas or Ohio, you might find more budget-friendly options.
This often includes retainer fee structures. Now, let’s look at how the Chapter 13 costs vary by state.
|State||How much do bankruptcy lawyers cost for Chapter 13|
|California||$3,300 - $4,800|
|Texas||$2,500 - $3,825|
|Alabama||$3,500 - $4,500|
Chapter 13 attorney fees tend to be higher and show more variation than Chapter 7 fees, both within states and between them. States like California offer a wide range, due to local market factors.
In Chapter 13 cases, you usually don’t have to pay all attorney costs upfront. You pay a part of the attorney’s fees before filing. The rest gets paid through your Chapter 13 repayment plan.
If you’re dealing with mortgage issues, filing for Chapter 13 can offer a process called “Loss Mitigation” to change your loan. For these cases, the fee is generally around $5,500.
Here are some scenarios to give you an idea of potential attorney’s fees.
|Scenario||Fees (Single Filing)||Fees (Joint Filing)|
|Retired on Fixed Income, No Home||$1,500||$1,500|
|Working, Below Median Income, No Home||$1,500||$1,800|
|Working, Above Median Income, No Home||$1,700||$2,000|
|Above Median Income, Home Owned||$1,800||$2,100|
|Self-Employed, Above Median Income, Home Owned||$2,000-$2,500||$2,300-$2,700|
The table reveals that attorney fees rise with income and property ownership. Joint filings usually cost more, except for retirees with no home.
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Taking two courses is generally required when you file for bankruptcy. The first is credit counseling before filing, and the second is a debtor education course after you’ve filed. Required counseling sessions cost between $20-$100.
Also to the filing fee and mandatory courses, other costs could include:
Besides to these, there are many other likely costs. Let’s look at each of them.
Adversary proceedings and appeals add extra costs to the bankruptcy process.
|Document Type||Amount ($)|
|Complaint / Notice of Removal||350.00|
|Cross Appeal/Direct Appeal Requesting||298.00|
|Direct Appeal Authorized||207.00|
Sometimes, there are changes to your case that also have associated fees.
|Conversion from Chapter 7 to 11||922.00|
|Reopen Chapter 7||260.00|
|Reopen Chapter 13||235.00|
|Amended Bankruptcy Schedules||32.00|
|Motions (e.g., Lift Automatic Stay)||188.00|
|Transfer of Claim||26.00|
Attorney and filing fees might be your main focus, but other court costs can also add to the total.
|Copy of electronic record outside court||$31 per record||Audio recordings separate, see item 4|
|Certification of document||$11||-|
|Exemplification of document||$23||-|
|Audio recording of a court proceeding||$32||Available in electronic format|
|Search of bankruptcy records||$32 per item||-|
|Payment returned (insufficient funds)||$53||-|
|Filing an appeal or cross-appeal||$293||Extra $207 fee if authorities approve the direct appeal|
|Motion to redact a record||$26 per case||Under appropriate circumstances, authorities may waive the fee.|
Taking everything into account:
The cheapest way to file bankruptcy is to go it alone, known as filing “pro se.” It’s less successful but can cost as low as $350 to $450. You might save money by filing bankruptcy yourself, but it’s tricky and less likely to succeed. Hiring a lawyer costs more, but you’re more likely to get the outcome you want.
Remember, every bankruptcy case is different, and these are just guidelines. Consult a qualified bankruptcy attorney for a precise estimate tailored to your situation.
It’s possible to file bankruptcy without a lawyer (pro se), although this has a low success rate and costs between $350-$450.
A bankruptcy filing can stay on your credit report for up to 10 years, depending on the type of bankruptcy.
Chapter 7 costs range from $1,600 to $3,000 including attorney fees, with a $338 filing fee. Chapter 13 costs between $3,000 to $5,000 for attorney fees and has a $313 filing fee. So, upfront, Chapter 7 is usually cheaper.
With a lawyer, the success rate is approximately 95%, while filing on your own (pro se) yields a success rate of around 56%.