diff --git a/jmbitcoin/jmbitcoin/secp256k1_transaction.py b/jmbitcoin/jmbitcoin/secp256k1_transaction.py
index d58deb7..854fbd2 100644
--- a/jmbitcoin/jmbitcoin/secp256k1_transaction.py
+++ b/jmbitcoin/jmbitcoin/secp256k1_transaction.py
@@ -174,6 +174,15 @@ def estimate_tx_size(ins: List[str], outs: List[str]) -> Union[int, Tuple[int]]:
         return nwsize
     return (wsize, nwsize)
 
+def tx_vsize(tx):
+    """
+    Computes the virtual size (in vbytes) of a transaction
+    """
+    raw_tx_size = len(tx.serialize())
+    witness_size = len(tx.wit.serialize())
+    non_witness_size = raw_tx_size - witness_size
+    return int(non_witness_size + .25 * witness_size)
+
 def pubkey_to_p2pkh_script(pub, require_compressed=False):
     """
     Given a pubkey in bytes, return a CScript
diff --git a/scripts/bumpfee.py b/scripts/bumpfee.py
new file mode 100755
index 0000000..de72776
--- /dev/null
+++ b/scripts/bumpfee.py
@@ -0,0 +1,283 @@
+#!/usr/bin/env python3
+
+from decimal import Decimal
+from jmbase import get_log, hextobin, bintohex
+from jmbase.support import EXIT_SUCCESS, EXIT_FAILURE, EXIT_ARGERROR, jmprint
+from jmclient import jm_single, load_program_config, open_test_wallet_maybe, get_wallet_path, WalletService
+from jmclient.cli_options import OptionParser, add_base_options
+import jmbitcoin as btc
+import sys
+
+jlog = get_log()
+parser = OptionParser(
+    usage='usage: %prog [options] [wallet file] txid',
+    description=
+    'Bumps the fee on a wallet transaction')
+parser.add_option('--psbt',
+                  action='store_true',
+                  dest='with_psbt',
+                  default=False,
+                  help='output as psbt instead of '
+                  'broadcasting the transaction.')
+parser.add_option('-o',
+                  '--output',
+                  action='store',
+                  type='int',
+                  dest='output',
+                  default=-1,
+                  help='optionally specify which output to deduct the fee from. Outputs '
+                  'are 0-indexed meaning the first output has an index value of 0 and the '
+                  'second, an index value of 1 and so on.')
+parser.add_option('-f',
+                  '--txfee',
+                  action='store',
+                  type='int',
+                  dest='txfee',
+                  default=-1,
+                  help='Bitcoin miner tx_fee to use for transaction(s). A number higher '
+                  'than 1000 is used as "satoshi per KB" tx fee. A number lower than that '
+                  'uses the dynamic fee estimation of your blockchain provider as '
+                  'confirmation target. This temporarily overrides the "tx_fees" setting '
+                  'in your joinmarket.cfg. Works the same way as described in it. Check '
+                  'it for examples.')
+parser.add_option('-a',
+                  '--amtmixdepths',
+                  action='store',
+                  type='int',
+                  dest='amtmixdepths',
+                  help='number of mixdepths in wallet, default 5',
+                  default=5)
+parser.add_option('-g',
+                  '--gap-limit',
+                  type="int",
+                  action='store',
+                  dest='gaplimit',
+                  help='gap limit for wallet, default=6',
+                  default=6)
+parser.add_option('--yes',
+                  action='store_true',
+                  dest='answeryes',
+                  default=False,
+                  help='answer yes to everything')
+add_base_options(parser)
+
+def check_valid_candidate(orig_tx, wallet, output_index=-1):
+    orig_tx_info = jm_single().bc_interface.get_transaction(orig_tx.GetTxid()[::-1])
+    # check that the transaction is still unconfirmed
+    if orig_tx_info['confirmations'] > 0:
+        raise RuntimeWarning('Transaction already confirmed. Nothing to do.')
+
+    # all transaction inputs must belong to the wallet
+    own_inputs_n = len(wallet.inputs_consumed_by_tx(orig_tx))
+    tx_inputs_n = len(orig_tx.vin)
+
+    if own_inputs_n != tx_inputs_n:
+        raise ValueError('Transaction inputs should belong to the wallet.')
+
+    # at least one input should signal opt-in rbf
+    if not any([vin.nSequence <= 0xffffffff - 2 for vin in orig_tx.vin]):
+        raise ValueError('Transaction not replaceable.')
+
+    # 1. If output_index is specified, check that the output exist
+    # 2. If not, check that we have only one output
+    # 3. If not, wallet should own at least one output that we can deduct
+    # fees from.
+    if output_index >= 0 and len(orig_tx.vout) > output_index:
+        return None
+    elif len(orig_tx.vout) == 1:
+        return None
+    elif not any(
+        [wallet.is_known_script(vout.scriptPubKey) for vout in orig_tx.vout]
+    ):
+        raise ValueError('Transaction has no obvious output we can deduct fees '
+                         'from. Specify the output to pay from using the -o '
+                         'option.')
+
+def compute_bump_fee(tx, fee_per_kb):
+    tx_info = jm_single().bc_interface.get_transaction(tx.GetTxid()[::-1])
+    tx_size_n = btc.tx_vsize(tx)
+    tx_fee = btc.amount_to_sat(abs(tx_info['fee']))
+    proposed_fee_rate = fee_per_kb / Decimal(1000.0)
+    proposed_fee = int(tx_size_n * proposed_fee_rate)
+    min_proposed_fee = tx_fee + tx_size_n
+    min_proposed_fee_rate = min_proposed_fee / Decimal(tx_size_n)
+
+    if proposed_fee < (tx_fee + tx_size_n):
+        raise ValueError('Proposed fee for transaction replacement: '
+                         '%d sats (%.1f sat/vB) is below minimum required '
+                         'for relay: %d sats (%.1f sat/vB). '
+                         'Try using a higher fee setting.'
+                         % (proposed_fee, proposed_fee_rate,
+                            min_proposed_fee, min_proposed_fee_rate))
+
+    return (proposed_fee - tx_fee)
+
+def prepare_transaction(new_tx, old_tx, wallet):
+    input_scripts = {}
+    spent_outs = []
+    for ix, vin in enumerate(new_tx.vin):
+        script = wallet.pubkey_to_script(
+            btc.extract_pubkey_from_witness(old_tx, ix)[0])
+        tx_info = jm_single().bc_interface.get_transaction(
+            hextobin(btc.b2lx(new_tx.vin[ix].prevout.hash)))
+        prev_tx = btc.CTransaction.deserialize(hextobin(tx_info['hex']))
+        amount = prev_tx.vout[new_tx.vin[ix].prevout.n].nValue
+
+        input_scripts[ix] = (script, amount)
+        spent_outs.append(btc.CMutableTxOut(amount, script))
+
+    return (input_scripts, spent_outs)
+
+def sign_transaction(new_tx, old_tx, wallet_service):
+    input_scripts, _ = prepare_transaction(new_tx, old_tx, wallet_service.wallet)
+    success, msg = wallet_service.sign_tx(new_tx, input_scripts)
+    if not success:
+        raise RuntimeError("Failed to sign transaction, quitting. Error msg: " + msg)
+
+def sign_psbt(new_tx, old_tx, wallet_service):
+    _, spent_outs = prepare_transaction(new_tx, old_tx, wallet_service.wallet)
+    unsigned_psbt = wallet_service.create_psbt_from_tx(
+        new_tx, spent_outs=spent_outs)
+    signed_psbt, err = wallet_service.sign_psbt(unsigned_psbt.serialize())
+
+    if err:
+        raise RuntimeError("Failed to sign PSBT, quitting. Error message: " + err)
+
+    return btc.PartiallySignedTransaction.deserialize(signed_psbt)
+
+def create_bumped_tx(tx, fee_per_kb, wallet, output_index=-1):
+    check_valid_candidate(tx, wallet, output_index)
+    fee = compute_bump_fee(tx, fee_per_kb)
+
+    if (
+        len(tx.vout) == 1
+        and tx.vout[0].nValue >= (fee + jm_single().BITCOIN_DUST_THRESHOLD)
+    ):
+        tx.vout[0].nValue -= fee
+        fee = 0
+    elif (
+        output_index >= 0
+        and len(tx.vout) > output_index
+        and tx.vout[output_index].nValue >= (fee + jm_single().BITCOIN_DUST_THRESHOLD)
+    ):
+        tx.vout[output_index].nValue -= fee
+        fee = 0
+    else:
+        for ix, vout in enumerate(tx.vout):
+            if wallet.is_known_script(vout.scriptPubKey) and fee > 0:
+                # check if the output is a change address
+                if wallet.script_to_path(vout.scriptPubKey)[-2] != 1:
+                    continue
+
+                # deduct fee from the change
+                tx.vout[ix].nValue -= fee
+                fee = 0
+
+                # if the output value is less than zero, remove it
+                if tx.vout[ix].nValue < 0:
+                    jlog.info("Dynamically calculated change lower than zero; dropping.")
+
+                    # update fee to the additional amount needed to pay for the tx
+                    # accounting for the removal of the output
+                    fee = abs(tx.vout[ix].nValue) - len(tx.vout[ix].serialize())
+                    tx.vout.remove(vout)
+                    continue
+
+                # if the output value is below the dust threshold, remove it
+                if tx.vout[ix].nValue <= jm_single().BITCOIN_DUST_THRESHOLD:
+                    jlog.info("Dynamically calculated change lower than dust: " +
+                        btc.amount_to_str(tx.vout[ix].nValue) + "; dropping.")
+                    tx.vout.remove(vout)
+                break
+
+    # create new transaction from the old
+    # there's the possibility that it returns the same transaction as the old
+    # if no outputs were available to deduct a fee from
+    return btc.CMutableTransaction(
+        tx.vin, tx.vout, nLockTime=tx.nLockTime,
+        nVersion=tx.nVersion)
+
+if __name__ == '__main__':
+    (options, args) = parser.parse_args()
+    load_program_config(config_path=options.datadir)
+    if len(args) < 2:
+        parser.error("JoinMarket bumpfee needs arguments:"
+                     " wallet file and txid.")
+        sys.exit(EXIT_ARGERROR)
+
+    wallet_name = args[0]
+    txid = args[1]
+
+    # If tx_fees are set manually by CLI argument, override joinmarket.cfg:
+    if int(options.txfee) > 0:
+        jm_single().config.set("POLICY", "tx_fees", str(options.txfee))
+    fee_per_kb = jm_single().bc_interface.estimate_fee_per_kb(
+        jm_single().config.getint("POLICY", "tx_fees"))
+    if fee_per_kb is None:
+        raise RuntimeError("Cannot estimate fee per kB, possibly" +
+                           " a failure of connection to the blockchain.")
+
+    # open the wallet and synchronize it
+    wallet_path = get_wallet_path(wallet_name, None)
+    wallet = open_test_wallet_maybe(
+        wallet_path, wallet_name, options.amtmixdepths - 1,
+        wallet_password_stdin=options.wallet_password_stdin,
+        gap_limit=options.gaplimit)
+    wallet_service = WalletService(wallet)
+    if wallet_service.rpc_error:
+        sys.exit(EXIT_FAILURE)
+    while not wallet_service.synced:
+        wallet_service.sync_wallet(fast=not options.recoversync)
+    wallet_service.startService()
+
+    orig_tx = wallet_service.get_transaction(hextobin(txid))
+
+    if not orig_tx:
+        jlog.error("Could not retrieve the transaction! Maybe it doesn't belong to this wallet?")
+        sys.exit(EXIT_FAILURE)
+
+    try:
+        bumped_tx = create_bumped_tx(orig_tx, fee_per_kb, wallet, options.output)
+    except ValueError as e:
+        jmprint(str(e), 'error')
+        sys.exit(EXIT_FAILURE)
+    except RuntimeWarning as w:
+        jmprint(str(w))
+        sys.exit(EXIT_SUCCESS)
+
+    # sign the transaction
+    if options.with_psbt:
+        try:
+            psbt = sign_psbt(bumped_tx, orig_tx, wallet_service)
+
+            print("Completed PSBT created: ")
+            print(wallet_service.human_readable_psbt(psbt))
+            jlog.info("This PSBT is fully signed and can be sent externally for "
+                      "broadcasting:")
+            jlog.info(psbt.to_base64())
+            sys.exit(EXIT_SUCCESS)
+        except RuntimeError as e:
+            jlog.error(str(e))
+            sys.exit(EXIT_FAILURE)
+    else:
+        try:
+            sign_transaction(bumped_tx, orig_tx, wallet_service)
+        except RuntimeError as e:
+            jlog.error(str(e))
+            sys.exit(EXIT_FAILURE)
+
+        jlog.info("Got signed transaction:")
+        jlog.info(btc.human_readable_transaction(bumped_tx))
+
+        if not options.answeryes:
+            if input('Would you like to push to the network? (y/n):')[0] != 'y':
+                jlog.info("You chose not to broadcast the transaction, quitting.")
+                sys.exit(EXIT_SUCCESS)
+
+        if jm_single().bc_interface.pushtx(bumped_tx.serialize()):
+            txid = bintohex(bumped_tx.GetTxid()[::-1])
+            jlog.info("Transaction sent: " + txid)
+        else:
+            jlog.error("Transaction broadcast failed!")
+            sys.exit(EXIT_FAILURE)
+
diff --git a/test/test_bumpfee.py b/test/test_bumpfee.py
new file mode 100644
index 0000000..599286d
--- /dev/null
+++ b/test/test_bumpfee.py
@@ -0,0 +1,431 @@
+import pytest
+from jmbase import hextobin
+import jmbitcoin as btc
+from jmclient import load_test_config, cryptoengine, jm_single, SegwitWallet, \
+    VolatileStorage, get_network, WalletService
+from scripts.bumpfee import (
+    check_valid_candidate, compute_bump_fee,
+    create_bumped_tx, sign_transaction, sign_psbt)
+
+def fund_wallet_addr(wallet, addr, value_btc=1):
+    # special case, grab_coins returns hex from rpc:
+    txin_id = hextobin(jm_single().bc_interface.grab_coins(addr, value_btc))
+    txinfo = jm_single().bc_interface.get_transaction(txin_id)
+    txin = btc.CMutableTransaction.deserialize(btc.x(txinfo["hex"]))
+    utxo_in = wallet.add_new_utxos(txin, 1)
+    assert len(utxo_in) == 1
+    return list(utxo_in.keys())[0]
+
+def test_tx_vsize(setup_wallet):
+    # tests that we correctly compute the transaction size
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**7
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats},
+                   {"address": wallet.get_internal_addr(0),
+                    "value": 10**8 - amount_sats - 142}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+
+    assert btc.tx_vsize(tx) in (142, 143)  # transaction size may vary due to signature
+
+def test_check_valid_candidate_confirmed_tx(setup_wallet):
+    # test that the replaceable transaction is unconfirmed
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**7
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats},
+                   {"address": wallet.get_internal_addr(0),
+                    "value": 10**8 - amount_sats - 142}])
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+    jm_single().bc_interface.tick_forward_chain(1)
+
+    with pytest.raises(RuntimeWarning, match="Transaction already confirmed. Nothing to do."):
+        check_valid_candidate(tx, wallet)
+
+def test_check_valid_candidate_unowned_input(setup_wallet):
+    # tests that all inputs in the replaceable transaction belong to the wallet
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**7
+
+    mnemonic = 'abandon abandon abandon abandon abandon abandon abandon abandon abandon abandon abandon about'
+    entropy = SegwitWallet.entropy_from_mnemonic(mnemonic)
+    storage = VolatileStorage()
+    SegwitWallet.initialize(
+        storage, get_network(), entropy=entropy, max_mixdepth=0)
+    wallet_ext = SegwitWallet(storage)
+    addr_ext = wallet_ext.get_external_addr(0)
+    utxo_ext = fund_wallet_addr(wallet_ext, addr_ext)
+
+    tx = btc.mktx([utxo, utxo_ext],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats},
+                   {"address": wallet.get_internal_addr(0),
+                    "value": (2 * 10**8) - amount_sats - 210}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success, msg = wallet_ext.sign_tx(tx, {1: (wallet_ext.addr_to_script(addr_ext), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+
+    with pytest.raises(ValueError, match="Transaction inputs should belong to the wallet."):
+        check_valid_candidate(tx, wallet)
+
+def test_check_valid_candidate_not_replaceable(setup_wallet):
+    # tests that the transaction is replaceable
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**7
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats},
+                   {"address": wallet.get_internal_addr(0),
+                    "value": 10**8 - amount_sats - 142}])
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+
+    with pytest.raises(ValueError, match="Transaction not replaceable."):
+        check_valid_candidate(tx, wallet)
+
+def test_check_valid_candidate_explicit_output_index(setup_wallet):
+    # tests that there's at least one output that we own and can deduct fees
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**7
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": 10**8 - amount_sats - 143},
+                   {"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x01").to_p2sh_scriptPubKey())),
+                    "value": amount_sats}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+
+    assert check_valid_candidate(tx, wallet, 0) == None
+
+def test_check_valid_candidate_one_output(setup_wallet):
+    # tests that there's at least one output that we own and can deduct fees
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**7
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": 10**8 - 111}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+
+    assert check_valid_candidate(tx, wallet) == None
+
+def test_check_valid_candidate_no_owned_outputs(setup_wallet):
+    # tests that there's at least one output that we own and can deduct fees
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**7
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": 10**8 - amount_sats - 143},
+                   {"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x01").to_p2sh_scriptPubKey())),
+                    "value": amount_sats}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+
+    with pytest.raises(ValueError, match="Transaction has no obvious output we can deduct fees from. "
+                       "Specify the output to pay from using the -o option."):
+        check_valid_candidate(tx, wallet)
+
+def test_check_valid_candidate(setup_wallet):
+    # tests that all checks are passed for a valid replaceable transaction
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**7
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats},
+                   {"address": wallet.get_internal_addr(0),
+                    "value": 10**8 - amount_sats - 142}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+
+    assert check_valid_candidate(tx, wallet) == None
+
+def test_compute_bump_fee(setup_wallet):
+    # tests that the compute_bump_fee method correctly calculates
+    # the fee by which to bump the transaction
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**7
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats},
+                   {"address": wallet.get_internal_addr(0),
+                    "value": 10**8 - amount_sats - 142}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+
+    assert compute_bump_fee(tx, 2000) in (142, 144)  # will vary depending on signature size
+
+def test_create_bumped_tx(setup_wallet):
+    # tests that the bumped transaction has a change output with amount
+    # less the bump fee
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**7
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats},
+                   {"address": wallet.get_internal_addr(0),
+                    "value": 10**8 - amount_sats - 142}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+    orig_tx = tx.clone()
+
+    bumped_tx = create_bumped_tx(tx, 2000, wallet)
+
+    assert orig_tx.vin[0] == bumped_tx.vin[0]
+    assert orig_tx.vout[0] == bumped_tx.vout[0]
+    assert (orig_tx.vout[1].nValue - bumped_tx.vout[1].nValue) in (142, 144)
+
+def test_create_bumped_tx_dust_change(setup_wallet):
+    # tests that the change output gets dropped when it's at or below dust
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**8 - jm_single().BITCOIN_DUST_THRESHOLD - 142
+    change_sats = 10**8 - amount_sats - 142
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats},
+                   {"address": wallet.get_internal_addr(0),
+                    "value": change_sats}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+    orig_tx = tx.clone()
+
+    bumped_tx = create_bumped_tx(tx, 2000, wallet)
+
+    assert orig_tx.vin[0] == bumped_tx.vin[0]
+    assert orig_tx.vout[0] == bumped_tx.vout[0]
+    assert len(bumped_tx.vout) == 1
+
+def test_create_bumped_tx_multi_dust_change(setup_wallet):
+    # tests that several change outputs get dropped when they are at or below dust
+    # to fulfill fee requirements
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**8 - (546*18) - 669
+    change_sats = 546
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats}] +
+                   [{"address": wallet.get_internal_addr(0),
+                    "value": change_sats} for ix in range(18)])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+    orig_tx = tx.clone()
+
+    bumped_tx = create_bumped_tx(tx, 3000, wallet)
+
+    assert orig_tx.vin[0] == bumped_tx.vin[0]
+    assert orig_tx.vout[0] == bumped_tx.vout[0]
+    assert len(bumped_tx.vout) == 16
+
+def test_create_bumped_tx_single_output(setup_wallet):
+    # tests that fees are deducted from the only output available
+    # in the transaction
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**8 - 111
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+    orig_tx = tx.clone()
+
+    bumped_tx = create_bumped_tx(tx, 2000, wallet)
+
+    assert orig_tx.vin[0] == bumped_tx.vin[0]
+    assert (orig_tx.vout[0].nValue - bumped_tx.vout[0].nValue) in (111, 113)
+
+def test_create_bumped_tx_output_index(setup_wallet):
+    # tests that the bumped transaction deducts its fee from the specified
+    # output even if it is an external wallet address
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**7
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats},
+                   {"address": wallet.get_internal_addr(0),
+                    "value": 10**8 - amount_sats - 142}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+    orig_tx = tx.clone()
+
+    bumped_tx = create_bumped_tx(tx, 2000, wallet, 0)
+
+    assert orig_tx.vin[0] == bumped_tx.vin[0]
+    assert orig_tx.vout[1] == bumped_tx.vout[1]
+    assert (orig_tx.vout[0].nValue - bumped_tx.vout[0].nValue) in (142, 144)
+
+def test_create_bumped_tx_no_change(setup_wallet):
+    # tests that the bumped transaction is the same as the original if fees
+    # cannot be deducted
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr, 0.00002843)
+    amount_sats = 2730
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 2843)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+    orig_tx = tx.clone()
+
+    bumped_tx = create_bumped_tx(tx, 3000, wallet)
+
+    assert orig_tx.vin[0] == bumped_tx.vin[0]
+    assert orig_tx.vout[0] == bumped_tx.vout[0]
+
+def test_sign_and_broadcast(setup_wallet):
+    # tests that we can correctly sign and broadcast a replaced transaction
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**8 - jm_single().BITCOIN_DUST_THRESHOLD - 142
+    change_sats = 10**8 - amount_sats - 142
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats},
+                   {"address": wallet.get_internal_addr(0),
+                    "value": change_sats}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+    orig_tx = tx.clone()
+
+    bumped_tx = create_bumped_tx(tx, 2000, wallet)
+    sign_transaction(bumped_tx, orig_tx, wallet_service)
+
+    assert jm_single().bc_interface.pushtx(bumped_tx.serialize()) == True
+
+def test_sign_psbt_broadcast(setup_wallet):
+    # tests that we can correctly sign and broadcast a replaced psbt transaction
+    wallet = setup_wallet[0]
+    wallet_service = setup_wallet[1]
+    wallet_service.resync_wallet()
+    addr = wallet.get_external_addr(0)
+    utxo = fund_wallet_addr(wallet, addr)
+    amount_sats = 10**8 - jm_single().BITCOIN_DUST_THRESHOLD - 142
+    change_sats = 10**8 - amount_sats - 142
+    tx = btc.mktx([utxo],
+                  [{"address": str(btc.CCoinAddress.from_scriptPubKey(
+                      btc.CScript(b"\x00").to_p2sh_scriptPubKey())),
+                    "value": amount_sats},
+                   {"address": wallet.get_internal_addr(0),
+                    "value": change_sats}])
+    tx.vin[0].nSequence = 0xffffffff - 2  # mark as replaceable
+    success, msg = wallet.sign_tx(tx, {0: (wallet.addr_to_script(addr), 10**8)})
+    success = jm_single().bc_interface.pushtx(tx.serialize())
+    orig_tx = tx.clone()
+
+    bumped_tx = create_bumped_tx(tx, 2000, wallet)
+    psbt = sign_psbt(bumped_tx, orig_tx, wallet_service)
+
+    assert jm_single().bc_interface.pushtx(psbt.extract_transaction().serialize()) == True
+
+
+@pytest.fixture(scope='module')
+def setup_wallet(request):
+    load_test_config()
+    btc.select_chain_params("bitcoin/regtest")
+    #see note in cryptoengine.py:
+    cryptoengine.BTC_P2WPKH.VBYTE = 100
+    jm_single().bc_interface.tick_forward_chain_interval = 2
+    jm_single().config.set('BLOCKCHAIN', 'network', 'testnet')
+    mnemonic = 'zoo zoo zoo zoo zoo zoo zoo zoo zoo zoo zoo abstract'
+    entropy = SegwitWallet.entropy_from_mnemonic(mnemonic)
+    storage = VolatileStorage()
+    SegwitWallet.initialize(
+        storage, get_network(), entropy=entropy, max_mixdepth=1)
+    wallet = SegwitWallet(storage)
+    wallet_service = WalletService(wallet)
+    return [wallet, wallet_service]