Chapter 7 Lawyer Fees

How Chapter 7 attorneys charge: a flat fee paid before filing

Chapter 7 is a short, standardized case, so attorneys almost always quote a single flat fee — commonly $1,000–$1,500.

What is unusual is the timing. The fee must be paid in full before the petition is filed, because filing discharges your debts and any attorney fee still owed at that moment would be discharged along with them.

Firms work around that with pre-filing payment plans: you pay the flat fee in installments over a few months and the case is filed once it clears. Some use bifurcated agreements splitting pre- and post-filing services into two contracts so the second can be financed afterwards — courts scrutinize these, so ask exactly what each contract covers and what the financed total is.

Ask what the flat fee excludes. Reaffirmation hearings, motions to avoid a judgment lien, adversary proceedings, and converting to Chapter 13 are commonly outside it, and the fee agreement should say so.

Attorney fee vs. court costs

The attorney's flat fee is separate from the court's costs. Every filer pays a $338 court filing fee, plus modest charges of roughly $10–$50 each for the required pre-filing credit counseling course and the pre-discharge debtor education course.

The filing fee has relief valves. It can be waived where household income falls below 150% of the federal poverty line, and courts routinely allow payment in installments otherwise — worth asking about, since it is the one government cost with genuine flexibility.

Small additional costs appear in most cases: credit report pulls, certified copies, and occasionally a valuation where an exemption is contested.

Ask any firm for the all-in number rather than the legal fee alone. A quote that omits the filing fee and courses understates the total by several hundred dollars.

What Chapter 7 does (and what you keep)

Chapter 7 discharges most unsecured debts — credit cards, medical bills, personal loans, old utility balances, and most judgments — typically within three to four months of filing.

In exchange a trustee may sell non-exempt property, but exemptions protect a baseline of assets and the overwhelming majority of consumer cases are no-asset cases in which nothing is sold and you keep everything you own.

Some debts survive. Most taxes, student loans absent a hardship showing, child support and alimony, criminal fines and restitution, and debts arising from fraud or drunk driving are not discharged, and evaluating that in advance is part of what the fee buys.

The automatic stay begins immediately on filing, halting collection calls, wage garnishment, lawsuits, and a scheduled foreclosure sale — which is often the most urgent reason people file.

Qualifying: the means test and the alternative

Chapter 7 is not available to everyone. The means test compares household income over the six months before filing to the median for your state and family size, and those below it qualify automatically.

Above the median, a second calculation deducts allowed living expenses and secured debt payments to determine whether meaningful disposable income remains. Many people who assume they earn too much still qualify after those deductions, which is why the test should be run rather than guessed.

Other eligibility rules apply: credit counseling within 180 days before filing, and waiting periods after a previous discharge — eight years since a prior Chapter 7 and four years since a Chapter 13.

Where the test is failed, Chapter 13 is the alternative, and it is sometimes the better outcome anyway — it cures mortgage arrears, protects non-exempt property, and can strip a wholly unsecured second mortgage, none of which Chapter 7 does.

Your house and your car in Chapter 7

Secured debts follow different rules from unsecured ones, and this is where most Chapter 7 questions actually arise.

Chapter 7 discharges your personal liability on a mortgage or car loan, but the lien survives — so keeping the property means continuing to pay. If you are current and the equity is exempt, most people keep the home and simply keep paying; if you are behind, Chapter 7 delays a foreclosure but does not cure the arrears.

For vehicles the choice is reaffirming the debt to keep the car and the loan, redeeming it by paying its current value in a lump sum, or surrendering it and discharging any deficiency. Reaffirmation is the common choice and the riskiest, because it puts you back on the hook personally.

Judgment liens against your home can often be avoided by motion where they impair an exemption — a filing that is sometimes excluded from the base fee but is frequently worth more than the fee itself.

What the process actually looks like

The case begins with the petition and schedules, which list every asset, debt, income source, expense, and transfer — accuracy matters more than anything else, because errors are corrected by amendment and omissions can cost the discharge.

A trustee is appointed and holds the meeting of creditors, generally about a month after filing. It is a short administrative meeting rather than a hearing, creditors rarely attend, and the trustee asks about your assets and the accuracy of the schedules.

Most cases then proceed quietly to discharge around sixty days after that meeting, with the debtor education course completed in the interim.

Complications are the exception but are worth knowing: a trustee investigating an asset or a recent transfer, a creditor filing an adversary proceeding alleging fraud, or a motion to dismiss for abuse. Each is billed outside the flat fee, and each is far less likely where the schedules were prepared carefully.

State exemptions and what Chapter 7 protects

Bankruptcy is federal, but the exemptions deciding what you keep are tied to your state — and they matter more than any other variable in a Chapter 7 case.

Some states permit a choice between the federal exemption set and their own; others require the state set. Residency rules determine which state's exemptions you may use at all if you have moved within the past two years, which occasionally produces a surprising answer.

Homestead protection is the widest variable. Texas and Florida protect home equity essentially without a dollar cap subject to acreage limits, California offers a large inflation-adjusted homestead, and several states protect only a few thousand dollars.

Vehicle, retirement, tools of trade, household goods, and wildcard exemptions stack on top, and retirement accounts are generally protected regardless of state. Fitting your assets to the available exemptions — and timing the filing accordingly — is the highest-value work inside a routine flat fee.

Before you file, and how to keep the cost down

Firstly, do nothing irreversible before advice. Repaying a relative, transferring property, cashing out a retirement account to pay credit cards, or running up new debt shortly before filing each create problems that cost far more to fix than the consultation would have.

Secondly, arrive organized. Six months of pay records, two years of tax returns, a full creditor list, bank statements, and vehicle and property values are needed regardless of who prepares the petition, and assembling them yourself keeps the quote at the bottom of the range.

Thirdly, be completely candid about transfers, side income, prior filings, lawsuits, and expected inheritances. Each is manageable when disclosed and expensive when discovered afterwards.

Finally, compare quotes on the all-in number and the exclusion list, and ask about a filing fee waiver. Where funds are genuinely short, legal aid and pro bono bankruptcy clinics handle qualifying cases at no cost, and the low-cost options are worth exhausting — most bankruptcy firms offer a free consultation that will tell you whether Chapter 7 is even the right tool.