Can I Get Help to Pay for Bankruptcy?

Bankruptcy offers a path to financial relief, but its associated costs can be daunting. Fortunately, various forms of assistance exist to make bankruptcy more accessible. Understanding these options is important for anyone considering this legal avenue.

Key Costs Associated with Bankruptcy

Filing for bankruptcy involves several financial obligations. The primary costs include court filing fees, which are standardized by the federal judiciary but vary based on the type of bankruptcy chapter filed. For instance, the filing fee for a Chapter 7 bankruptcy is generally $338, while a Chapter 13 bankruptcy typically costs $313. These fees are paid directly to the court to initiate the legal process.

Beyond court fees, attorney fees often represent a significant portion of the overall cost. Engaging legal counsel can range from approximately $1,000 to $3,000 for a Chapter 7 case, and typically between $2,500 and $6,250 for a Chapter 13 case, reflecting the increased complexity and longer duration of these cases. Attorney fees compensate lawyers for their expertise, preparation of complex legal documents, and representation throughout the bankruptcy proceedings. Individuals must also complete mandatory credit counseling before filing and a debtor education course after filing, with each course usually costing between $10 and $50.

Strategies for Reducing Bankruptcy Filing Fees

Individuals facing financial hardship may be eligible to reduce or waive bankruptcy court filing fees. One primary method is applying for a fee waiver, specifically available for Chapter 7 bankruptcy cases. To qualify for a fee waiver, an individual’s household income must generally be less than 150 percent of the federal poverty guidelines for their family size, and they must demonstrate an inability to pay the fee, even in installments.

The application for a Chapter 7 filing fee waiver is made using Official Form B 200. This form requires detailed financial information, including income, household size, monthly expenses, cash on hand, bank account balances, and property ownership. The information provided on this form should align with the financial details submitted in the bankruptcy petition and schedules to ensure consistency and accuracy. Submitting the completed Form B 200 along with the bankruptcy petition allows the court to review the request concurrently.

If a full fee waiver is not granted or if the individual does not qualify, paying the filing fee in installments is another available option. This arrangement allows individuals to pay the total fee over a specified period, typically in up to four payments over 120 to 180 days after the petition is filed. To request an installment plan, individuals must file Official Form B 200. The application requires outlining the proposed payment schedule, including the amount and due date for each installment. The court will review the application and may approve the plan, often requiring that all payments be completed within a few months. Failure to make timely payments can result in the dismissal of the bankruptcy case.

Finding Affordable Legal Representation

Securing legal representation for bankruptcy does not always require significant upfront costs, as several avenues exist for affordable or free assistance. Pro bono services, where attorneys offer their time and expertise without charge, offer assistance for individuals with limited financial means. These services are often facilitated through local bar associations, specialized pro bono programs, and law school clinics, which provide legal aid.

Legal aid societies also offer free or low-cost legal assistance to eligible individuals. Eligibility for these services is typically based on income thresholds, often set at or below 125% to 150% of the federal poverty guidelines. These non-profit organizations handle civil legal issues, including bankruptcy, and provide representation or advice. Individuals can locate legal aid services through online directories or by contacting their local court clerk’s office for referrals.

Beyond pro bono and legal aid, some private bankruptcy attorneys offer flexible payment arrangements to make their services more accessible. These may include payment plans, where the total fee is spread out over time, or sliding scale fees adjusted based on the client’s income. Many attorneys also provide free initial consultations, allowing individuals to discuss their situation and explore potential options without any financial commitment. These consultations help individuals understand the process and determine if an attorney’s services are appropriate.

Non-profit credit counseling agencies can offer referrals for legal assistance. These agencies provide the mandatory pre-filing credit counseling and post-filing debtor education courses, often at a low cost or with fee waivers for those who qualify based on income. They may be able to direct individuals to legal resources within their community that offer reduced-cost or free bankruptcy services.