Low-Income Assistance

It can be hard to believe that it costs money to file for bankruptcy, but for most people, that's the case. Even so, there are ways to absorb the fees. If your income is low, and hiring an attorney or paying court fees is beyond your reach, these resources might help you find free or low-cost bankruptcy help.

Reduced or Free Legal Services

Ways to cut costs exist, but it can take effort to locate the services available in your area. Here are some places to start.

• Legal aid services. You might qualify for free bankruptcy services through a legal aid office. Your family income must be less than 125% of the federal poverty guidelines, or no more than 200% of the poverty line if other factors are present. Visit the Legal Services Corporation website to find a link to your local legal aid provider.
• Legal clinics. Many local bar associations and social service agencies offer clinics you can attend to get law-related questions answered. Bankruptcy advice or even assistance filing a case might be available, too. Law schools also hold public clinics staffed by students supervised by professors. The local bar association should be able to direct you to area locations. If not, try an online search.
• Pro bono legal services. Attorneys are encouraged to donate time providing legal services to consumers who can't afford to pay. Many local bar associations keep a list of lawyers willing to provide representation for free or at a reduced rate. Finding a quality bankruptcy attorney for cheap or free can be difficult but it is very possible and can greatly reduce bankruptcy costs.

It's a good idea to have billing and bank statements, paycheck stubs, and tax returns organized before meeting with a provider. The more straightforward your case appears, the better luck you're likely to have retaining someone.

Bankruptcy Attorney Payment Plans

If you don't qualify for free or reduced-cost legal services, there's no harm in scheduling an appointment with a qualified bankruptcy attorney. In fact, most offer a free, no-obligation consultation.

Not only is it likely that the attorney will suggest ways for you to find the legal fees, but many offer payment plans. Some jurisdictions even allow you to include attorneys' fees in a Chapter 13 repayment plan payment.

Filing Bankruptcy on Your Own

Individuals don't have to hire an attorney in a bankruptcy case. You can file a "pro se" or "pro per" case. Some bankruptcy courts offer information to help pro se filers, so this route might not be as difficult as you imagine—especially if you have a simple matter.

For instance, your case should be relatively easy to complete if you don't have:

• a car or home loan
• a business
• property other than necessary items, such as clothing and inexpensive household furnishings, and
• nondischargeable debts (debts that don't get wiped out in bankruptcy, such as support obligations and recent unpaid income taxes).

Be aware, however, that if you run into trouble, the consequences can be severe (you could lose valuable property).You should also know pro se cases are less likely to make it to discharge (the court order that forgives debt). Chapter 13 cases are more difficult than Chapter 7 cases because the requirements for approval of the Chapter 13 repayment plan are not only extensive but are sometimes difficult even for attorneys.

If you go this route, you'll find a link to your local bankruptcy court's website by visiting the U.S. Court's locator page. Fillable, downloadable bankruptcy forms are on the U.S. Courts bankruptcy portal.

Bankruptcy Court Filing Fees

The bankruptcy court charges a fee when you file your paperwork. If you can't afford the fee, you can ask the court to waive it if:

• you're filing a Chapter 7 case
• you're an individual (not a business), and
• your family income is less than 150% of the federal poverty guidelines.

If you can pay over time, you can ask to pay the filing fee in installments over 120 days, instead. The clerk's office of your local bankruptcy court can show you how to make either request.

Credit Counseling and Debtor Education Fees

All individuals filing a bankruptcy case must participate in a pre-filing credit counseling session and a post-filing financial management course. The agencies providing these services (either online or by phone) charge a fee averaging about $25 per class. Ask the provider to reduce or waive the cost if you meet low-income qualifications.