How Can I File Bankruptcy at Low or No Cost?
Bankruptcy on a Tight Budget
There are two out-of-pocket costs to bankruptcy:
- Lawyer’s fee
- Court filing fees
You can avoid lawyer’s fees two ways: File your own bankruptcy or find a lawyer whose time will not cost you anything.
You can avoid filing fees by asking the court for a fee waiver.
Avoiding Lawyer’s Fees
You can file your bankruptcy petition on your own, which will avoid any lawyer's fees. However, filing on your own a risky strategy.
Most self-created and filed bankruptcy petitions are not successful. Virtually all lawyer-produced bankruptcy petitions succeed. Why? Bankruptcy law is among the most technical specialty areas of law. It's easy to make a mistake with bankruptcy paperwork, which will cause the court to dismiss the case.
Bankruptcy lawyers are specialists. They learn bankruptcy law inside out. Bills.com recommends readers filing bankruptcy to do so with a lawyer's assistance to have the best chance of success.
If you can't afford a lawyer, then consult with a local organization that helps low- and no-income consumers find low- and no-cost legal services. See the Bills.com article Where to Find No-Cost Legal Aid if You Have Low or No Income. Help may be available, but you need to ask for it.
Avoiding Bankruptcy Court Fees
Bankruptcy courts provide options to people who cannot afford filing fees.
For example, if your income is below a certain amount, the court may waive your filing fee altogether.
Even if your income does not qualify you for a fee waiver, the court may allow you to pay your fee in installments rather than a lump sum. Discuss filing fee options with your lawyer.
- Make sure you understand the difference between a Chapter 7 bankruptcy that discharges your debts and a Chapter 13 bankruptcy where the court will supervise a repayment plan.
- Look at all your bankruptcy alternatives, including credit counseling and debt settlement.
- Meet with a legal aid organization in your area, to see if you qualify for free attorney assistance.
- Research whether you are eligible to have the bankruptcy filing fees waived.