How To File Chapter 7 Bankruptcy With No Money in 2024

Filing Chapter 7 bankruptcy comes with costs. You face court fees, credit counseling fees, and attorney fees. But you can file for free or at very low cost. If your income is low enough, you can request a court fee waiver. You can also get reduced or waived credit counseling fees. Filing without a lawyer is possible. Free resources can help guide you through the process. If you prefer legal help, you may qualify for free or low-cost assistance from legal aid organizations or pro bono attorneys.

Can You File Chapter 7 Bankruptcy With No Money?

Yes, you can file Chapter 7 bankruptcy with no money. Costs exist, like court filing fees, credit counseling fees, and attorney fees. But you have ways to reduce or eliminate these expenses.

For example, if your income is low enough, you can apply for a fee waiver. Fee waivers help you avoid paying the court filing fee. Fee waivers are also available for low-income individuals to help with credit counseling course costs.

Many people successfully file Chapter 7 bankruptcy without paying anything upfront. You need to qualify for waivers and use free resources to prepare your forms. The key is understanding your options and taking advantage of available resources.

What Costs Are Involved in Chapter 7 Bankruptcy?

The overall cost of filing Chapter 7 bankruptcy depends on your situation. Case complexity affects total expenses. The most common costs in a Chapter 7 case are:

• Filing fee: Everyone who files bankruptcy must pay a filing fee or submit a fee waiver to the bankruptcy court.
• Credit counseling fees: Bankruptcy law requires every filer to complete two credit counseling courses. You complete one before filing bankruptcy. You complete the other before the bankruptcy is discharged.
• Attorney fees: Hiring a bankruptcy attorney to handle your case is often the biggest expense for Chapter 7 filers.

We’ll examine each expense and show you how to reduce or eliminate each cost.

How Much Is the Bankruptcy Filing Fee?

For Chapter 7, the fee is $338. You typically pay when you file your paperwork. If you can’t pay the filing fee, you can apply for a fee waiver.

How To Get Your Filing Fee Waived

If you can’t afford the filing fee, you can apply for a fee waiver. You submit the proper bankruptcy form. To qualify, your household income must be below 150% of the federal poverty guideline for your family size.

You also need to show you can’t afford to pay the fee. Even paying in installments must be beyond your means. The bankruptcy judge will review your application. The judge may ask for more details before making a decision.

If the judge approves your waiver, you won’t pay the filing fee at all. If the judge denies your request, you may have to pay the full amount. You may be able to set up a payment plan. Payment plans allow up to four installments. Some courts may hold a short hearing before making a final decision.

Need more guidance? Read our detailed guide on applying for a bankruptcy filing fee waiver.

What If You Don’t Qualify for a Fee Waiver?

If you don’t qualify for a fee waiver, you can apply to pay the filing fee in installments. Complete the required form and submit it to the court. If you don’t submit it with your bankruptcy petition, submit it as soon as possible after your waiver request is denied.

In your application, you’ll propose a payment plan. Most courts allow up to four payments. The full amount is due within 120 days of filing your case.

What Are the Credit Counseling Course Fees?

Credit counseling course fees usually range from $12 to $50 per course. You may be able to get them reduced or waived. Under bankruptcy law, you must complete two credit counseling courses from an approved nonprofit agency.

• You complete the first credit counseling course before you file your bankruptcy petition.
• You complete the second course (the financial management course) after you file your bankruptcy case. You need it to qualify for the bankruptcy discharge.

These courses are available online, by phone, or in person in some areas.

If your household income is below 150% of the federal poverty guideline, federal law requires agencies to offer a fee waiver or discount. Each credit counseling agency has its own process for fee waivers. The amount they reduce varies by agency. But they must tell you if you qualify and what discounts are available.

How Much Do Bankruptcy Attorneys Charge To File Chapter 7?

Most bankruptcy attorneys charge a flat fee for Chapter 7 cases. The average cost is $1,500 to $2,500. Fees vary based on where you live and how complex your case is. If your financial situation is straightforward, your fee will likely be on the lower end. If you have a complicated case, the fee may be higher.

If you hire a lawyer, you’ll need to pay their fee in full before filing your case. Once you file bankruptcy, your attorney can’t be one of your creditors. If you still owed them money at the time of filing, they’d technically be a creditor.

Signs Your Chapter 7 Case Might Be Complicated

Most Chapter 7 cases are straightforward. Certain factors can make things more complex. You might run into challenges if:

• You own property or assets that aren’t fully covered by exemptions in your state.
• You’re close to the income limit for Chapter 7 based on the means test.
• You have significant disposable income listed on your bankruptcy forms.
• You’re involved in a lawsuit to recover money, and the case is still pending.
• You owe tax debt from multiple years or have debts related to a divorce.
• A creditor has a judgment against you, especially if you own real estate.
• You’ve made large payments to a lender or had wages garnished ($600+ in the past 90 days).
• You filed a previous Chapter 7 case within the past eight years or had a bankruptcy dismissed in the past year.

Do You Have To Hire a Lawyer to File Chapter 7?

No, you don’t have to hire a lawyer. A bankruptcy lawyer can be helpful if your financial situation is complex. Professional help is valuable if you’re worried about handling the paperwork correctly. Many people with straightforward cases file on their own and succeed.

Tips for Filing Chapter 7 Successfully With Limited Resources

Filing for Chapter 7 bankruptcy doesn’t have to be expensive. You can file Chapter 7 with little or no money. Here are a few more tips to help your case succeed on a budget:

• Get organized
• Use free tools and support
• Explore low-cost or free legal help
• Get creative

We’ll examine each of these strategies in detail.

1. Get Organized

Staying organized makes filing for Chapter 7 much easier. Organization increases your chances of getting a discharge. Gather important documents before you start filling out your bankruptcy forms. You need pay stubs, bank account statements, tax returns, and current credit reports.

Being organized also helps you avoid common mistakes, such as:

• Forgetting to list a creditor in your bankruptcy
• Using the wrong address or account number, which could prevent a creditor from getting proper notice
• Entering estimated or inaccurate information in your petition, schedules, or forms
• Not having proof to back up the details in your paperwork if the bankruptcy trustee or judge asks for it

Taking the time to get your financial records in order upfront makes the process smoother. You avoid delays or complications.

2. Use Free Tools and Support

Many free resources exist to help you file Chapter 7 on a budget. The official U.S. Courts website (uscourts.gov) offers free downloads of every bankruptcy form. You’ll find instructions and links to helpful resources. Many bankruptcy courts provide guides or assistance for people filing without a lawyer (pro se filers).

Using the right tools makes filing for bankruptcy easier and more affordable.

3. Explore Low-Cost or Free Legal Help

If your case is complex or you’d feel more comfortable with a lawyer, you may find affordable or even free legal help.

• Legal aid organizations: These nonprofits provide free or low-cost legal services to people who qualify. Many focus on specific geographic areas. Check to see what’s available in your state. Not all legal aid groups handle personal bankruptcy. Some have income restrictions.
• Pro bono attorneys: Some private bankruptcy lawyers take cases for free as part of pro bono work. Your state bar association may be able to help you find one.

If hiring a lawyer isn’t in your budget, these options help you get legal advice without paying full attorney fees. You might also want to speak with a bankruptcy attorney for free to discuss your situation and explore your options.

4. Get Creative

Not everyone qualifies to file Chapter 7 for free. You may need to come up with some money to cover the costs. Here are a few ways people do this:

• Pause payments on unsecured debts: Chapter 7 wipes out unsecured debts like credit cards and medical bills. You can fall behind on payments. Some filers temporarily stop making these payments to put that money toward bankruptcy costs instead.
• Use your tax refund: If you expect an income tax refund before filing, you may be able to use it to cover your bankruptcy fees.
• Sell personal items: The bankruptcy trustee can sell non-exempt assets to repay creditors. Selling things on your own before filing lets you control how the money is used. Even if something is exempt, you may still choose to sell it to help cover costs.

What Are the Chapter 13 Bankruptcy Fees?

Chapter 13 bankruptcy usually costs more than Chapter 7. Chapter 13 takes longer and is more complex. Instead of wiping out debts quickly, Chapter 13 involves a repayment plan. The plan lasts 3 to 5 years. You make monthly payments to a bankruptcy trustee.

Here’s how the costs compare:

• Filing fee: Chapter 13 filers pay a $313 filing fee. Fee waivers aren’t available. You can request to pay in installments.
• Credit counseling courses: Just like Chapter 7, Chapter 13 requires two courses. You take one before filing and one before your case is completed.
• Attorney fees: Chapter 13 is more complicated than Chapter 7. Most people need a lawyer to file successfully. You can usually include attorney fees in your repayment plan instead of paying them upfront.
• Trustee fees: Plan payments include an administrative fee for the Chapter 13 trustee. The fee is usually a percentage of what’s paid to creditors.

Filing Chapter 13 without a lawyer is much harder than filing Chapter 7 on your own. If you’re considering Chapter 13, talking to a bankruptcy attorney can help you understand your options.

How Is Chapter 13 Different From Chapter 7?

Chapter 7 and Chapter 13 are the two most common types of consumer bankruptcy. But they work very differently.

Chapter 7 provides fast debt relief. You wipe out unsecured debts like credit cards, medical bills, and personal loans. Most cases take just a few months. You don’t have to make monthly payments. Chapter 7 is a great option if you have little to no disposable income. You want a fresh start as quickly as possible.

Chapter 13 requires a court-approved repayment plan. Instead of wiping out debt right away, you make payments over 3 to 5 years. Chapter 13 can help you catch up on secured debts like a car loan or mortgage. It can also help you catch up on priority debts like past-due child support or unpaid income taxes.

A Chapter 13 trustee collects your payments and distributes them to creditors based on your plan terms. At the end of your repayment period, any remaining eligible debt is discharged.

Chapter 13 isn’t a good option for someone with no money. You need a steady income to make your plan payments.

Take Action on Your Debt Today

The most common expenses involved in Chapter 7 bankruptcy are the filing fee, credit counseling costs, and attorney fees. Fortunately, you may be able to avoid or reduce some or all of these costs. If your income is below 150% of the federal poverty guideline, you can apply to have your filing fee waived or request to pay it in installments. You also qualify to have your credit counseling fees waived or reduced.

You have options for getting help with your debt. Professional guidance can make the process easier and less stressful.