How Much Does It Cost to File Bankruptcy in Alabama?

Filing bankruptcy in Alabama usually runs about $1,200 to $2,000 out of pocket for a Chapter 7 case, and considerably more for Chapter 13, where attorney fees alone can reach $4,800 depending on the district. The total cost to file bankruptcy in Alabama breaks down into a court filing fee, attorney fees, two mandatory education courses, and, for Chapter 13 filers, a trustee’s cut of every plan payment. Knowing which pieces are fixed and which are negotiable makes the number easier to plan around.

The Court Filing Fee

The filing fee is set at the federal level and is identical in all three of Alabama’s bankruptcy districts. Chapter 7 is $338. Chapter 13 is $313.1United States Bankruptcy Court Eastern District of New York. Fee Schedule The amount doesn’t change based on how much you owe or how many creditors you list.

If you can’t pay the full fee at filing, you can submit Form 103A and ask to pay in up to four installments. All installments must be done within 120 days of filing, and a judge can stretch that to 180 days for good cause.2Legal Information Institute. Federal Rules of Bankruptcy Procedure Rule 1006 – Filing Fee

Chapter 7 filers have one more option. If your household income is below 150 percent of the federal poverty guidelines and you can’t manage even the installment plan, you can file Form 103B to have the fee waived entirely.3United States Courts. Application to Have the Chapter 7 Filing Fee Waived No equivalent waiver exists for Chapter 13.

Attorney Fees

Attorney fees are the largest expense in a typical case. You’re not required to hire a lawyer, but pro se Chapter 13 filers in particular see most of their cases dismissed within months, so for most people the fee pays for itself.

Chapter 7

A Chapter 7 attorney in Alabama generally charges a flat fee somewhere between $800 and $1,500. The exact figure depends on how many creditors you have, whether you own significant assets, and how complicated the overall picture is. Expect to pay the full amount before the petition is filed. Once a case is open, any unpaid fee becomes a pre-petition debt that could be discharged along with everything else, so attorneys collect upfront to protect themselves.

Chapter 13

Chapter 13 costs more because the attorney has to design and administer a three-to-five-year repayment plan. The upside is that you don’t have to pay it all before filing. A portion is due up front, and the balance is folded into your monthly plan payments.

Each Alabama district publishes a “no-look” fee, the maximum amount the court will presume reasonable without requiring the attorney to file a detailed fee application. The current caps:

An attorney can request more than the no-look amount, but only by filing a detailed application the court must approve. Most Chapter 13 lawyers in Alabama charge at or below the cap.

The Two Required Education Courses

Federal law requires every individual filer to complete two courses from approved providers. In Alabama, those providers are approved by the Bankruptcy Administrators rather than the U.S. Trustee Program, but the requirements are the same.7United States Courts. Credit Counseling and Debtor Education Courses

The first is a pre-filing credit counseling session, taken within 180 days before you file. The certificate goes in with your petition. The second is a debtor education course on budgeting and credit, taken after filing but before the court will enter your discharge.8United States Department of Justice. Credit Counseling and Debtor Education Information

Each course usually costs $10 to $50, so figure $20 to $100 combined. Many approved agencies waive the fee for filers whose income is below 150 percent of the federal poverty guidelines. Ask when you sign up and have pay stubs or benefit letters ready. If the waiver is denied, you pay the standard price.

The Chapter 13 Trustee’s Percentage

Chapter 13 filers carry one ongoing cost that Chapter 7 filers never see. The Chapter 13 trustee collects your monthly plan payment and distributes it to creditors, and keeps a percentage of each payment for that service. Federal law caps the fee at 10 percent for non-family-farmer debtors, and the actual rate varies by district and is sometimes lower.9Office of the Law Revision Counsel. 28 USC 586 – Duties; Supervision by Attorney General

You won’t see a separate bill. The percentage is built into the plan payment your attorney designs, so what reaches your creditors is the payment minus the trustee’s cut. Spread across three to five years, it’s a real number.

Other Costs That Can Come Up

A few extra expenses show up often enough to budget for, even though none are universal.

If the value of your home or another asset is disputed, the court or your attorney may want a professional appraisal. Residential appraisals generally run $450 to $800, and you pay. This comes up most often in Chapter 13 cases where the plan math depends on accurate property values.

If a creditor challenges whether a debt should be discharged, or if you need to sue a creditor, that happens in a separate adversary proceeding. The filing fee is $350, but it’s waived when the debtor is the one bringing the action.10United States Courts. Bankruptcy Court Miscellaneous Fee Schedule That waiver matters, because debtors are typically the ones who need to file.

Some attorneys also pass through small costs for credit reports, postage, and copying. Usually minor. Worth asking about so your final bill doesn’t surprise you.

Which Chapter You Qualify For Drives the Total

The biggest single factor in what you’ll spend is which chapter applies to you, and that isn’t always your choice. Chapter 7 is faster, cheaper, and wipes out most debts outright. Chapter 13 is more expensive and locks you into years of payments.

Eligibility turns on a federal income test. If your household income, annualized, is at or below Alabama’s median family income for your household size, you’re generally clear to file Chapter 7 and no one can push you out based on income.11Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13 If you’re above the median, a more detailed calculation subtracts allowed expenses from your income. When the leftover disposable income is high enough to fund real repayment, the court presumes Chapter 7 would be abuse of the system, and Chapter 13 becomes your route. Your attorney runs the test, but knowing it exists tells you whether to plan around a $1,500 total bill or a multi-year commitment past $5,000.

When the Cost Isn’t Worth It

Before paying anyone, check what you actually owe. Several categories of debt survive a bankruptcy discharge entirely, and if most of your debt is on this list, filing may not solve the problem:

  • Child support and alimony are fully protected from discharge.
  • Most government or nonprofit student loans survive unless you can prove undue hardship, a standard that is notoriously hard to meet.
  • Recent tax debts, especially where the return was filed late, filed fraudulently, or never filed, are generally non-dischargeable.
  • Debts obtained through fraud or misrepresentation stay with you. The law also presumes fraud for luxury purchases over $500 made within 90 days of filing and cash advances over $750 within 70 days.
  • Debts for death or personal injury caused by driving while intoxicated cannot be discharged.
  • Criminal fines, traffic tickets, and other government penalties survive bankruptcy.

These categories apply regardless of whether you file Chapter 7 or Chapter 13.12Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge If your main burden is student loans or back support, the filing fees and attorney costs won’t buy you relief.