The real cost of filing bankruptcy
The filing fees you see online are only a fraction of actual bankruptcy costs. The federal court filing fee for Chapter 7 is $338 and for Chapter 13 is $313 — but attorney fees, credit counseling, debtor education, and in Chapter 13 the three-to-five-year plan payments dwarf those numbers. A typical Chapter 7 case runs $1,500–$3,500 all-in. A typical Chapter 13 runs $4,000–$7,500 in attorney fees alone, plus 36–60 months of plan payments.
The sticker price often isn’t the real decision driver. The real question is which chapter gives you the outcome you need — full discharge with asset retention (Chapter 7) or structured repayment to keep a house out of foreclosure (Chapter 13).
Chapter 7 vs Chapter 13 at a glance
Chapter 7 (liquidation): Wipes out most unsecured debt — credit cards, medical bills, personal loans, some older taxes — in 4–6 months. The trustee can sell non-exempt assets to pay creditors, but most filers pass through with no asset sales because state exemptions cover everything they own. Requires passing the means test (your income must be below the state median for a household your size, or you must show disposable income is negative).
Chapter 13 (reorganization): Consolidates debt into a 3–5 year court-supervised repayment plan. You keep all your property including non-exempt assets. The plan pays some portion of unsecured debt (often pennies on the dollar) from your disposable income. Used when you have regular income, significant non-exempt equity you want to keep, or you’re trying to catch up on a mortgage or car loan in arrears.
Attorney fee breakdown
Bankruptcy attorneys charge flat fees set largely by market convention and the “no-look” fee approved by local bankruptcy courts. Typical 2026 ranges:
- Chapter 7, simple case: $1,200–$2,500. No business ownership, income below the means-test threshold, standard consumer debt.
- Chapter 7, complex case: $2,500–$5,000. Business assets, means-test problems, recent transfers to family, or adversary proceedings.
- Chapter 13, “no-look” fee: $3,500–$6,500 depending on district. This is the fee local courts pre-approve without requiring detailed billing. Most attorneys work within it.
- Chapter 13, complex case: $6,500–$10,000+ when above the no-look or when significant motion practice is anticipated.
Key difference: in Chapter 7 the attorney must be paid in full before filing (fee paid pre-petition becomes part of the bankruptcy estate if owed at filing). In Chapter 13 most of the attorney fee is paid through the plan over 3–5 years, which is why people often file 13 when they can’t afford the upfront cost of 7.
Required add-on costs
- Credit counseling course (pre-filing): $10–$50, sometimes free for low income. Must be completed within 180 days before filing.
- Debtor education course (post-filing): $10–$50. Required before discharge; without it, you don’t get the discharge.
- Credit reports: $0–$30 if your attorney doesn’t pull them.
- Court filing fee: $338 Chapter 7 / $313 Chapter 13 (can be paid in installments or waived for low income under 150% of federal poverty level).
State exemptions: what you actually get to keep
Exemptions protect property from the bankruptcy estate. Every state has its own exemption scheme, and 17 states let you choose federal exemptions instead. The big-ticket exemptions:
- Homestead: Ranges from $0 (New Jersey, Pennsylvania technically) to unlimited (Florida, Texas, Iowa, Kansas, Oklahoma, South Dakota, DC). Federal homestead is ~$27,900 as of 2026.
- Motor vehicle: $3,000 (federal) up to $15,000+ in generous states.
- Household goods / personal property: $14,875 federal, varies by state.
- Retirement accounts: 401(k), 403(b), traditional pensions: unlimited federal exemption. IRAs: up to ~$1.5M exempt.
- Wildcard: $1,475–$15,000+ in cash or any property your state allows.
The exemption you qualify for is generally determined by the state you’ve lived in for the 730 days (two years) before filing — not where you live today if you moved recently. If you moved within two years, there’s a complex rule that may force you to use federal exemptions or exemptions from your prior state.
When Chapter 7 is the right move
- Most of your debt is unsecured (credit cards, medical, personal loans).
- Your household income is below your state’s median.
- Your assets fit within state exemptions (most consumer filers do).
- You want the fastest path to discharge (typically 4–6 months).
- You haven’t received a Chapter 7 discharge in the last 8 years.
When Chapter 13 makes more sense
- You’re behind on a mortgage and want to cure arrears over 3–5 years to avoid foreclosure.
- You have non-exempt assets you want to keep (inherited property, investment accounts, high equity).
- Your income is above the state median and you fail the Chapter 7 means test.
- You have co-signers on unsecured debt whom you want to protect (Chapter 13 co-debtor stay).
- You have debts that aren’t dischargeable in Chapter 7 (recent taxes, domestic support, some student loans) and need a payment structure.
What bankruptcy does NOT discharge
Neither chapter wipes out:
- Student loans (almost never discharged except in rare undue hardship cases).
- Recent tax debts (income taxes under 3 years old, payroll/sales tax, tax fraud).
- Domestic support obligations — child support and alimony.
- Criminal fines and restitution.
- Debts from fraud, drunk driving injuries, or willful/malicious harm.
- Secured debts on property you want to keep — you still have to pay the mortgage or car loan.
Credit impact and recovery
Chapter 7 stays on your credit report for 10 years; Chapter 13 stays for 7 years. Both cause an immediate score drop of 130–240 points for those with previously good credit. Recovery is faster than most people expect: within 12–24 months of discharge, many filers qualify for FHA mortgages, auto loans at reasonable rates, and standard credit cards. The reason is simple — post-bankruptcy you’re actually a lower default risk than you were before filing because you can’t file again for years.
Related calculators
- Attorney fee calculator — compare flat fee vs hourly structures for legal help.
- Court fee estimator — full filing costs for federal and state courts.
- Settlement calculator — compare debt settlement with creditors vs filing bankruptcy.
- Small claims guide — low-cost path for disputed creditor claims before filing.