Chapter 7 bankruptcy focuses on reducing and eliminating the debts of those who have low incomes or high debt-to-income ratios. With a Chapter 7 bankruptcy, you might have some of your assets liquidated in order to pay back some or all of what you owe.
The good thing about a Chapter 7 bankruptcy is that it does not result in the loss of all your assets. There are many exemptions that allow you to keep items that you need (and some of what you want) so that you're not starting over from scratch.
Some debtors want to file for Chapter 7 bankruptcy but believe that it's too expensive. It's true that there are some costs associated with filing for bankruptcy, but you may be able to make payments for those expenses to allow you to start the bankruptcy process.
How much does a Chapter 7 bankruptcy cost?
A Chapter 7 bankruptcy can cost anywhere from a few hundred to several thousand dollars. Here are some of the costs associated with filing for bankruptcy with the court:
- Filing fees that range from $300 to $400 (approximately $335 for Chapter 7 bankruptcy)
- Attorney fees
- Credit counseling fees (generally nominal at around $50)
- Debtor education course fees that can range from $50 to $100
Most bankruptcies end up costing between $1,500 and $2,000 out-of-pocket, which is a range considered typical for Chapter 7.
How can you pay bankruptcy fees?
Bankruptcy fees can be expensive, but knowing that you have limited funds, there may be ways to pay them over time. Your attorney can discuss more options for filing an affordable Chapter 7 bankruptcy with you.