If you are facing financial challenges and significant debt, they may seem insurmountable. The prospect of bankruptcy might have crossed your mind more than once.
Your main concern may be the expenses associated with starting the bankruptcy process. Financial transparency is key during difficult times, so it is important to know how much it costs to file for bankruptcy and what your options are.
Filing fees
The first financial aspect to consider is the filing fee required to submit your bankruptcy petition to the court. Bankruptcy comes in different chapters, with Chapter 7 and Chapter 13 being the most common for individuals. The Chapter 7 filing fee for 2023 is $338, while the Chapter 13 filing fee is $313. These fees contribute to the administrative costs of handling your case. Legal fees vary depending on the difficulty of the case. Chapter 7 legal fees must be paid before the case is filed. Most Chapter 13 legal fees are included in the monthly payments.
Credit counseling costs
Before filing for bankruptcy, it is mandatory to undergo credit counseling. This counseling helps you explore alternatives to bankruptcy and understand the implications of your financial decisions. The cost of credit counseling varies, but it may range from $20 to $50. Keep in mind that this fee may be waivable if your income is below a certain threshold.
Educational course expenses
Another requirement after filing for bankruptcy is to complete a financial management course. Similar to credit counseling, the cost of this course varies, typically ranging from $20 to $50. As this education is an unavoidable part of the bankruptcy process, it is essential to budget for this expense.
The United States Courts report that there were 418,724 bankruptcy filings for the year ending June 2023. This figure not only shows that bankruptcy is a common and accepted method of debt relief but also that it is accessible to a wide variety of people with various financial backgrounds.