The No-Cost Bankruptcy

Many people who file for bankruptcy do not have the financial means to hire an attorney or bankruptcy preparer. There are a couple of options available to the insolvent debtor, but all require self-teaching, time, and patience.

The Bankruptcy Court does not require debtors to have counsel in order to file, under any chapter. Still, it is strongly suggested that a debtor at least seek the help of an experienced bankruptcy attorney, even if they plan to file in pro per. There is also the option of hiring a bankruptcy preparer, who will prepare all of the debtor's documents for him to file on his own. Bankruptcy preparers may or may not be attorneys, and may not have the authority to provide legal assistance beyond preparing the forms.

Nonetheless, there are countless reputable publications available which lay out the bankruptcy procedure for those who wish to proceed on their own. The required forms are available from the Bankruptcy Court at no charge. Bankruptcy filing fees are the same for debtors who file with or without an attorney. A debtor who cannot afford to pay the fee in full at the time of filing may apply to pay the fee in installments over time. A debtor who absolutely cannot pay the filing fee may apply for a fee waiver. Debtors applying for the waiver must show that their income is less than 150% of the poverty guideline applicable to their family size, and that they cannot afford to pay the fee in installments. Chapter 7 debtors may apply for either the fee waiver or request to pay in installments, though chapter 13 debtors may only seek to pay in installments; fee waiver is not available in chapter 13 cases.

For some individuals, filing a chapter 7 bankruptcy and receiving a discharge can be done at little to no cost. I have seen individuals file chapter 7 bankruptcies on their own with few issues, if any. Chapter 13 bankruptcy, on the other hand, is far more complex, and most of the time requires at least passive guidance from an experienced bankruptcy attorney.