This article is for informational purposes only and should not be construed as legal or financial advice. If you need legal advice, you can contact a bankruptcy attorney.
First, I will cover one option that you can look into to file with no money, and then I'll share an option that is under $100 that may make the process much simpler.
Understanding Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows you to discharge most of your debts. It’s often called a "fresh start" bankruptcy. This process can help you eliminate unsecured debts like credit card balances and medical bills. It involves selling your non-exempt assets to repay creditors. However, many people retain their essential assets through bankruptcy exemptions. While filing can be costly, it's essential to understand the long-term benefits of reducing or eliminating overwhelming debt. One thing to understand is whether you QUALIFY for Chapter 7 bankruptcy. As such, you may consider taking a
free Chapter 7 qualification calculator to estimate if you qualify for Chapter 7 bankruptcy.
1st Option: No Attorney + Filing Fee Waived + Credit Counseling Course Waived
Let's go through the process.
A) Filling Out The Necessary Bankruptcy Forms
The bankruptcy attorney generally will collect intake information and fill out the bankruptcy forms for you. That said, the biggest cost when filing Chapter 7 bankruptcy is often the lawyer's fee, so if you file on your own, you do not bear that cost. I wrote an entire guide covering
how to file bankruptcy without a lawyer that you may consider reading.
To do this, you may need to understand what bankruptcy forms and which to fill out. Here are some of the forms you may need to fill out. Please note that these may be the bare minimum # of forms. I included a link to some of the actual forms, and you will notice that this process can be very cumbersome. Here's the
list of the bankruptcy forms.
Form 106D
Form 106 E/F
Form 106G
Form 106H
Form 106J
Form 106Sum
Form 106Dec
Form 107
Form 108
Here's a screenshot of a checklist of items to complete, the court information, the download petition package, and the filing checklist based on the district where you live.
In addition, you may want to know that the bankruptcy forms are quite complex. For example, Check out a small portion for
Schedule E/F: Creditors Who Have Unsecured Claims below. I'll provide software later that is like a "Turbotax for Bankruptcy" that is a simple questionnaire based system that may help simplify the process.
The form is just 6 pages, but it feels like they crammed 20 pages of material on those 6 pages.
Let's next talk about the filing fee.
B) Get the Filing Fee Waived
The filing fee for a Chapter 7 bankruptcy is $338, so to file for free, you would have to get that filing fee waived.
So, you may want to see whether you may qualify for getting your filing fee waived.
c) Get Credit Counseling Course and Debtor Education Course Fee Waived.
When you file Chapter 7 bankruptcy, you may have to take a credit counseling and debtor education course.
As such, you may be able to qualify for a free course if you meet the above requirements to get your filing fee waived.
2nd Option - Get Started For Free and Under $100 Total
If the above option is too complete, the second option is to use bankruptcy filing software.
1. Question-based instead of form-based, which simplifies the process
2. Automated case tracking after filing, so you don't miss important deadlines
3. Credit rebuilding training after getting forgiven from your debt to avoid common bankruptcy credit reporting mistakes
In addition, the Fresh Start Finance software estimates qualification, provides local resources to your district, provides your estimated court information and its contact number, and a filing checklist. The software also saves the data, so you do not have to complete everything at one time, and shares a checklist to share where you may be in the process
Unfortunately, not every used case can qualify for software, so feel free to check the link below to see whether you may be able to qualify to use the software.
Here are some of the pictures from the product.
Question-Based
Simple Checklist
Automated Case Updates
Credit Rebuilding Training
Let's next discuss hiring a bankruptcy attorney.
3rd Option: Hire Affordable Attorney $500 - $1000
First, you may have to search far and wide to find an affordable bankruptcy attorney
Finding an Affordable Bankruptcy Attorney
Look for Free Consultations
Take advantage of these consultations to discuss your case and understand the fees involved.
During these meetings, you can negotiate fees and payment plans.
Use these consultations to gauge the attorney's experience and comfort with your case.
A free consultation is a great opportunity to ask about potential hidden costs and get a clear understanding of the payment structure.
Can You Find a $500 Bankruptcy Attorney?
It’s rare, but possible. A $500 fee depends on several factors:
- Type of Bankruptcy: Simple Chapter 7 cases are cheaper.
- Location: Attorney fees vary by region.
- Attorney's Experience: Less experienced attorneys may charge less.
- Case Complexity: Straightforward cases cost less.
- Involvement: If most work is done by paralegals, costs decrease.
Check if these conditions apply to you to find a cheaper attorney.
Research local legal aid societies or nonprofit organizations that offer pro bono legal assistance.
Sometimes, law schools have clinics where supervised law students help with bankruptcy cases for free or at a reduced cost.
Using Payment Plans
Installment Plans Before Filing
Some attorneys allow you to pay in installments before filing. They start working on your case while you make weekly or monthly payments.
Once you’ve paid in full, they file your case. This can spread the cost over several months, making it more manageable.
Be sure to ask about the details of the payment plan, such as interest rates and any additional fees, to ensure it's a feasible option for you.
Installment Plans After Filing
Finding an attorney who accepts post-filing payments is difficult.
Most require full payment before filing because their fees get discharged in Chapter 7. But it’s worth asking if any local attorneys offer this option.
If you find one, ensure you understand the terms and are confident in your ability to make the payments as agreed.
Requesting Fee Waivers
Waiver of Filing Fee
If your income is very low, you might qualify for a waiver of the Chapter 7 filing fee.
You need to submit an application (Bankruptcy Official Form B 3A) with your petition.
This can save you a significant amount of money.
Review the eligibility criteria carefully and provide all required documentation to support your request.
Waiver of Bankruptcy Course Fees
You also need to complete two bankruptcy courses: a Credit Counseling Course and a Debtor Education Course.
Some providers might waive these fees if you qualify.
Contact the course providers to see if you can get a fee waiver.
Ask about any specific criteria or required documentation for the fee waiver and plan to complete these courses well ahead of your filing date.
Borrowing Money
From Friends or Family
Some people borrow money from friends or family to cover bankruptcy costs.
Be cautious with this option. You cannot repay the debt before or during your Chapter 7 case.
However, after your case is closed, you can choose to repay it.
Discuss the situation openly with your lender and ensure they understand the legal implications of repaying the loan after your bankruptcy.
Seeking Free Legal Aid
The second way that you may be able to get a $0 bankruptcy is the following:
1. Finding a legal aid organization or pro bono program to help you fill out
US bankruptcy forms3. Fill out the bankruptcy course waiver
Please note that this may be very difficult as most people who are filing bankruptcy have no money, so it may be difficult to get free aid.
Legal Aid Organizations
Depending on your financial situation, you might qualify for free legal aid.
Many states offer Pro Bono programs through the Bar Association or have legal aid offices.
They can provide you with a free attorney to help with your case.
Contact local legal aid organizations and explain your situation to see if you qualify for their services.
Pro Bono Programs
Check if your state has a Pro Bono Directory.
For example, California offers such a directory for legal aid.
These programs can be a lifeline if you can’t afford to hire an attorney.
Be prepared to provide detailed financial information to demonstrate your need for assistance.
Additional Tips
Keep Detailed Records
Gather all your financial information before filing.
This includes debts, income, assets, expenses, and tax filings from the past four years.
Detailed records help you fill out forms accurately and avoid issues during the process.
Keeping organized records can also help you track your progress and make informed decisions.
Stay Informed
Bankruptcy laws and forms change. Make sure you’re using the most up-to-date information.
Check the United States Courts website for the latest forms and guidelines.
Regularly review updates and changes to bankruptcy laws to ensure you're compliant and informed throughout the process.
Be Cautious
Filing without an attorney is risky. If the trustee determines that your property can be sold to repay debts, you might not be able to stop it. Some bankruptcy attorneys allow payment plans which help if you have no money today. Mistakes in your paperwork or missed deadlines can lead to your case being dismissed, so double-check everything and seek help if you're uncertain.
Conclusion
Filing Chapter 7 bankruptcy with no money is challenging but possible.
Look for attorneys offering payment plans or waivers for filing fees. Consider filing without an attorney if you feel confident. Explore legal aid programs for free assistance. Borrowing from friends or family can also help.
Remember, the goal is to get a fresh financial start, so choose the option that best fits your situation. Take control of your financial future by understanding your options and making informed decisions.
