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A lot of people don't even consider bankruptcy because they assume they can't afford it. That being said, there are ways to reduce the upfront cost.
So, if you want to file Chapter 7 bankruptcy, but you are afraid you cannot afford to file a bankruptcy case, here are some lower cost strategies that may help.
First, you may want to take our attorney fee calculator below to see what the potential rate may be in your area. This calculator provides estimated bankruptcy costs based on your zip code. You can compare the results to what you are seeing in the market and you can also have a local attorney reach out directly for a free consultation. Most bankruptcy attorneys offer free consultations, so you can understand pricing early in the conversation.
It's uncommon, but not impossible to find very low attorney fees. But thankfully you can get a free bankruptcy consultation where you can understand the cost or use the calculator above to help. All that to say, a $500 bankruptcy attorney fee case may be possible depending on 5 main factors related to your case.
Attorney fees typically depend on:
In general, extremely low fees usually apply to very simple Chapter 7 cases with minimal attorney involvement.
You can read more about bankruptcy lawyer fees here.
Finding a completely free bankruptcy attorney is even less common. Many people are already experiencing financial hardship to even afford bankruptcy, so lawyers will often set up payment plans or do a $0 down option.
The reason is often that bankruptcy attorneys have costs, so they have to recoup those costs by charging for their services. That said, you may be able to find free legal services with your local legal aid, but I these services are usually reserved for individuals with extremely limited income.
Some bankruptcy lawyers offer installment plans before filing Chapter 7. The attorney’s office handles telephone calls from your creditors and begins working on your bankruptcy forms while you pay weekly or monthly payments to the law firm.
When you pay the fees and costs in full, the law firm files your bankruptcy case.
This option is harder to find as many attorneys require payment in full before filing a Chapter 7 case. The reason is that an attorney’s fees are discharged through the Chapter 7 case. Therefore, attorneys are more cautious about accepting payments for attorneys’ fees after they do the work to file the bankruptcy case.
Depending on your income level, you might qualify for a waiver of the Chapter 7 filing fee. In the alternative, you might qualify to pay the Chapter 7 filing fee in installments. To do this, you must file an application to waive a bankruptcy filing fee (Bankruptcy Official Form B 3A) with your Chapter 7 bankruptcy petition.
You may also qualify for a waiver of the fees for both bankruptcy courses. You must work directly with the company providing your Credit Counseling Course and Debtor Education Course to determine if you qualify to waive these bankruptcy costs.
You are allowed to file Chapter 7 without hiring an attorney. Some individuals choose to file bankruptcy without an attorney. There are online resources available if you decide to file on your own.
We provide an overview of the Chapter 7 process and a Chapter 7 calculator on our website. We also provide information about Chapter 7 bankruptcy in our bankruptcy blog. You can also find information about filing without an attorney from the United States Courts. Local bankruptcy courts often have information on their website about filing bankruptcy without an attorney. You can search online or call the local bankruptcy Clerk of the Court’s Office.
Nolo has a guide to filing Chapter 7 bankruptcy you can purchase online. It is not considered legal advice, but it is advertised as a step-by-step guide for filing Chapter 7. One thing to be aware of: bankruptcy laws and forms change periodically. If you file on your own, make sure you're using the most up to date information. It is important that you ensure you are using the most up-to-date information available if you decide to file Chapter 7 without an attorney.
If you decide to file bankruptcy without an attorney, you need to be cautious. Once you file Chapter 7 you can't always change your mind and dismiss the case. If the Chapter 7 trustee believes you have non-exempt property then it could be sold.
You may want to consider filing Chapter 13. Most bankruptcy attorneys include a majority of their attorneys’ fees in the Chapter 13 plan. You may also want to explore bankruptcy alternatives for debt relief.
Depending on your financial situation, you may qualify for legal aid. If you qualify for legal aid, you are assigned an attorney who helps you with your bankruptcy case. Many states have a Pro Bono program through the state’s Bar Association. Other states have legal aid offices you can contact.
Some individuals borrow money from a friend or family member to cover the costs of filing Chapter 7. However, be very careful. Be careful not to repay friends or family right before filing. You may be required to disclose the debt on your Chapter 7 bankruptcy forms. The debts owed to friends and family members are typically discharged through your Chapter 7 case. However, if you choose to repay this debt after your Chapter 7 case is closed, you could do so.
Ascend allows you to compare debt-relief options, including bankruptcy and debt settlement. You can take our Chapter 7 means test calculator which allows you to estimate whether you qualify for Chapter 7 bankruptcy and how much it may cost. If you are interested to see what the cost of an attorney would be in your area, use the calculator below.
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