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How Much Does It Cost to File Personal Bankruptcy - and Where Do You Get the Money?

written by: Stephanie Mojica•edited by: Doreen Martel•updated: 3/15/2011

How much does it cost to file personal bankruptcy? It may feel ironic to have to pay for debt relief when you're in such dire financial straits, but in most cases you will indeed have to pay at least a couple of hundred dollars to file bankruptcy.

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    Basic Overview

    How much does it cost to file personal bankruptcy? Before researching the answer to that question, you should make sure you understand what bankruptcy will and will not do for your personal spending plan.

    First, don't count on including every single debt you ever incurred in your bankruptcy case. Unless you're seriously disabled or went to a college that is out of business, don't plan on including federal government student loans in bankruptcy. You must fully repay those debts along with your child support and alimony obligations and court fines. If you committed a crime like drunken driving and were successfully sued in court, you can't include the resulting civil judgment in any type of bankruptcy. Also, debts incurred right before bankruptcy can't be reduced or eliminated in your case. Finally, unless your outstanding tax bills were incurred at least three years ago you can't include them in bankruptcy.

    The bottom line? If your debts are mostly of this nature, you're likely better off not filing bankruptcy as this legal process cannot help such debts no matter how badly off you are financially.

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    Court Cost Basics

    Most people who file personal bankruptcy elect to eliminate approved debts under Chapter 7 or request a partial debt repayment plan under Chapter 13. As of 2011, it cost $274 to request a Chapter 13 plan and $299 to file Chapter 7. People living below the poverty level may qualify for a Chapter 7 fee waiver. In some cases, working debtors qualify for an installment payment plan. But all court costs must be fully paid before your bankruptcy case will be finalized. Also, bankruptcy courts will not accept credit cards or personal checks as payment for bankruptcy court costs.

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    Do You Need An Attorney?

    Most people filing a case don't need the assistance of a lawyer, notes the book "How to File for Chapter 7 Bankruptcy." Unless you find assistance through legal aid or get a lawyer to take your case pro bono, you will spend hundreds and sometimes thousands of dollars to hire a bankruptcy attorney. They also will not accept credit cards or checks from debtors.

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    Covering Legal Fees

    As soon as you decide to file bankruptcy, it's a great idea to stop paying your creditors. You can use these funds to cover bankruptcy court costs, any legal fees if you need to hire a lawyer and of course take care of your basic living needs. Don't pay some creditors on time and not others; some bankruptcy judges will look upon this as a type of favoritism and this may harm your bankruptcy case. Once you make the decision to file bankruptcy, stop paying those creditors and stick to it. Because once you've filed bankruptcy, they can't legally sue you or garnish your wages.

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    Tax Refund Considerations

    Tax refunds are another factor to consider when answering the question of, "How much does it cost to file personal bankruptcy?" If you are owed a tax refund and your Chapter 7 case isn't finalized, you will probably forfeit those funds to offset your creditors' financial losses. But once your Chapter 7 case is finalized, your future tax refunds are your property to do with as you wish. Chapter 13 debtors usually must use part or all of their tax refunds toward creditor repayment. Once the three-to-five year debt restructuring plan is paid off, Chapter 13 filers can once again do whatever they like with their tax refunds.

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    "How to File for Chapter 7 Bankruptcy"; Stephen Elias, Albin Renauer and Robin Leonard; 2009

    U.S. Courts: Bankruptcy Filing Fees.