If you're considering bankruptcy, not being able to afford to hire an attorney can add to the anxiety you already feel. However, the law allows individuals to file Chapter 7 and Chapter 13 bankruptcy petitions without using an attorney. Nonetheless, you may want to seek help in filing your petition, because bankruptcy laws are complex. Local organizations may offer free or low-cost assistance; a legal document service is another possible resource.
The two most common types of personal bankruptcy petitions are Chapter 7 and Chapter 13. Chapter 7 involves liquidation of the debtor's non-exempt assets, that is, selling her possessions to satisfy financial obligations, after which she receives a discharge that relieves her of any further obligation to pay. However, creditors often receive nothing from a Chapter 7 bankruptcy, because many debtors have few if any assets that are not protected by exemptions.
Chapter 13 is a repayment plan for debtors with regular income; the debtor proposes a repayment plan that lasts from three to five years. Chapter 13 does not involve liquidation; however, many debtors are able to reduce their overall financial burden by filing Chapter 13.
Bankruptcy Fees and Costs
It may seem ironic, but there are fees involved with filing for bankruptcy. Counsel fees for individual bankruptcy cases can cost several thousand dollars depending upon what type of bankruptcy you file. Chapter 13 fees are typically paid through the plan, but Chapter 7 fees must be paid up front to the attorney before the case is filed.
Even without attorney's fees, you must pay standard court fees for Chapter 7 and Chapter 13. As of March 2020, the fee for filing Chapter 7 is $335, and the fee for filing Chapter 13 is $310. Additional fees are required for the credit counseling course you must complete before filing your petition and the financial management course that is mandatory to complete after you file your petition; those fees can add another $50 to $100 to your total costs.
Filing Without an Attorney
Filing without an attorney is known as filing pro se. This means that you must complete all the paperwork associated with your petition, file the required documentation with the proper officials and appear in court on your own.
Legal clinics and nonprofit agencies frequently offer assistance to pro se bankruptcy filers in completing their paperwork. However, these organizations cannot serve as legal representatives, and their staff attorneys cannot appear with bankruptcy petitioners in court.
There are also petition preparation companies that help fill out paperwork, but they cannot give legal advice, and they are heavily monitored by the Office of the United States Trustee to prevent unauthorized practice of law.
Considerations When Filing Pro Se
If you are filing for Chapter 7 bankruptcy and you cannot afford court filing fees, you may apply for a waiver of the filing fee or to pay the fee in installments.
To obtain a complete waiver, your income must be less than 150 percent of the poverty guidelines published by the United States Department of Health and Human Services for households of the same size and located in the same state.
If you don't qualify for a waiver, you may pay the fee in installments by filing an application with the court. Making a mistake at any stage in the process of filing your bankruptcy petition, including failure to file forms or failure to pay the filing fees, may result in your case being dismissed rather than discharged.
Chris Blank is an independent writer and research consultant with more than 20 years' experience. Blank specializes in social policy analysis, current events, popular culture and travel. His work has appeared both online and in print publications. He holds a Master of Arts in sociology and a Juris Doctor.