How to File Chapter 7 with No Money?

3,344 families filed bankruptcy using Upsolve.

Written by Eva Bacevice, Esq.  
Updated July 30, 2019

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The great irony of bankruptcy is that people who most need the relief that bankruptcy is designed to offer are the exact people who cannot afford to file. Often people do not know how much it costs to file a Chapter 7, but they know that attorneys cost money, money they do not have in their current financial state. In this article we will explore what bankruptcy costs entail, the various methods available to file for a Chapter 7 case without any or very limited funds:

What costs are involved in a Chapter 7 bankruptcy?

  • Filing fees

  • Debtor Education course fees

  • Attorney fees

  • Free consultations

  • Negotiating a reduced fee

Are there alternative methods to paying directly?

  • Installment payment plans

  • Borrowing from family or friends

  • Use tax refund

  • Stop paying your creditors and save up

  • Pro bono attorneys and Legal Aid

What fees are avoidable? Are there alternative methods to:

  • Avoid attorney fees by filing pro se

  • Seek payment in installments or waiver of filing fees

  • Chapter 13 fee only plan

How can you reduce costs as much as possible without sacrificing the quality of your filing?

  • Use Upsolve to guide you every step of the way

What costs are involved in a Chapter 7 bankruptcy?

To start, let’s examine what costs are involved in a Chapter 7 bankruptcy.

Filing Fees

First, you have costs associated with the actual filing of your bankruptcy petition. These are fees set by the court to file your bankruptcy paperwork and start your case. Chapter 7 filing fees are $335.

Debtor Education course fees

You will need to pay for the required Debtor Education fees. There are two parts to this requirement, a component that takes place before you file and one that you complete after filing. Costs can vary depending on which provider you use, but generally speaking reasonable fees for both courses should be less than $50.

Attorney fees

The largest cost as well, as the cost with the most variance, are attorney fees. The cost of hiring an attorney is often the stumbling block that keeps many people from pursuing a bankruptcy case. Attorney fees can vary from hundreds to thousands of dollars, depending on the attorney and the complexity of your case. Currently the average cost of attorney fees in a Chapter 7 case ranges from $1,200 to $1,500, not including court filing fees.

Free consultations

Keep in mind, however, that many attorneys will offer free consultations to potential clients. You can set an appointment and speak with an attorney to discuss what your options are, and whether bankruptcy is the best option for you.

Negotiate a reduced fee

You may also be able to negotiate a reduced fee with the attorney. It never hurts to ask.

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Are there alternative methods to paying directly?

Installment payment plans

You can explore alternative methods to payment in full up front. Many attorneys will offer installment payment plans to clients because they understand the financial bind you are in. The catch here, however, is that in most cases the installment payments must all be made before your case is filed.

Borrowing from family or friends

You might want to consider asking your family or friends for help.

Use tax refund

Many people will utilize their tax refund to fund the costs of their bankruptcy. It is very common to see an uptick in bankruptcy filings around tax season.

Stop paying your creditors and save up

There is always the option of saving up to file your case. If you are planning on filing for bankruptcy, you can use the money you would ordinarily be dedicating towards paying off your debts to pay for the fees associated with filing for bankruptcy.

You can try to find an attorney willing to take your case pro bono. Some attorneys will offer their services for free to people who cannot afford to pay. Contact the bar association in your state for potential referral sources to pro bono attorneys.

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What fees are avoidable?

Avoid attorney fees by filing pro se

You can avoid the cost of hiring an attorney by filing and representing yourself pro se. Many people are able to successfully represent themselves in a straightforward Chapter 7 case.

Seek payment in installments or waiver of filing fees

There is the option to request to pay your filing fees in installments, or in some cases waive them altogether. The latter is only an option if your combined family income is less than 150% of the official poverty line. Requesting the option to pay your filing fee in installments is relatively straightforward so long as you are able to pay the filing fee in up to four (4) payments within 120 days of your bankruptcy filing date. You will need to complete Form 103A Application for Individuals to Pay the Filing Fee in Installments. If you qualify to waive the $335 court fee you will receive notice in the mail that your filing fees have been waived.

Chapter 13 fee only plan

Some states allow a “Chapter 13 fee only plan”. In all Chapter 13 payment plans, attorney fees are built in along with your other expenses. Some states will allow you to file a Chapter 7 case on your debt while simultaneously filing a Chapter 13 case just to address your attorney costs. This is not available everywhere and there is a good chance that your attorney fees would be higher because there is more work involved in filing a Chapter 13 case.

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Conclusion

How can you reduce costs as much as possible without sacrificing the quality of your filing?

Concern over the cost of bankruptcy is both completely understandable and common. Using the suggestions above, you may be able to reduce the costs involved significantly, and possibly entirely if your circumstances warrant it. If you do decide to file a case on your own to save costs make certain that you have straightforward Chapter 7 case and utilize Upsolve to help guide you every step of the way to the successful completion of your case. You can use Upsolve and take the screener to find out if you have a straightforward case and to find out if you qualify to file with Upsolve.

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Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can’t access their basic rights when they can’t afford to pay for help. Combining direct services and advocacy, we’re fighting this injustice.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.

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