How to File Bankruptcy for Free

There are several types of bankruptcy, but only one allows you to file for free. That's Chapter 7, which gives individuals with almost no assets a chance to wipe out their debts. If your income is less than 150% of the poverty line for where you live, you may qualify to have a Chapter 7 filing fee waived. If you file a Chapter 13 case, you cannot get a fee waiver, but you might be able to pay the fee in installments if you qualify.

TL;DR (Too Long; Didn't Read)

You can file a bankruptcy case without a lawyer, and if your case is a Chapter 7 case and your income is low enough, you might be able to get the filing fee waived. If you file a Chapter 13, however, you cannot waive the filing fee, but you can apply to pay it in installments.

Types of Bankruptcy

Federal law breaks bankruptcy into several chapters:

  • Chapter 7 is for individuals who can't afford to pay back their debts at all. You can use a Chapter 7 to wipe out certain debts (not all debts can be discharged in bankruptcy), and if you don't own a lot of assets, you'll likely be able to keep all your things. It costs $335 to file the petition as of March 1, 2019.
  • Chapter 11 is for corporations that choose to reorganize, paying off some debts and erasing others. Individuals can also file Chapter 11, but it can be quite expensive. It costs $1717 to file the petition.
  • Chapter 12 is for family farmers and fishermen. It costs $275 to file the petition.
  • Chapter 13 sets up a multi-year debt payment plan for individuals. The court wipes out the remaining debts at the end of the payment period if the debtor did everything he was supposed to do. It costs $310 to file the petition.

Waiver of the Chapter 7 Filing Fee

Chapter 7 is the bankruptcy procedure for individuals who don't have enough income to qualify for a Chapter 13 repayment plan, and a fee waiver may be available. Download Form 103B – Application to Have the Chapter 7 Filing Fee Waived and complete it with the necessary information:

  • family income
  • projected changes to your income within the next 120 days
  • non-cash government assistance
  • monthly expenses
  • whether anyone helps you pay the bills
  • cash you have on hand
  • other assets, such as a home

If your combined family income is less than 150 percent of the federal poverty guideline, you may qualify for a fee waiver. The court will either grant the waiver, schedule a hearing to discuss your request, or reject the waiver. If the judge refuses to grant you the fee waiver, he can still permit you to pay the fees on an installment plan.

Paying the Filing Fee in Installments

The installment plan gives you the option to make four fee payments over 120 days after you file bankruptcy, instead of paying the whole amount up front. Unlike the waiver, it's available to individuals in every chapter. Download Form 103A – Application for Individuals to Pay the Filing Fee in Installments from the U.S. Courts website. Fill out the dates of your proposed payments and the amount of each installment. Submit it to the court with your other paperwork for the judge's decision.

Filing Without an Attorney

Individuals are permitted to file bankruptcy without an attorney (businesses cannot represent themselves in court). If you file your own Chapter 7 case and get the filing fee waived, you were able to file a bankruptcy for free. Be careful, however, about representing yourself; bankruptcy paperwork has parts that are complicated and intended for attorneys to understand, and the court employees cannot help you fill it out, because they cannot give legal advice.

Almost all bankruptcy attorneys provide free consultations. If you're strapped for cash, it's worth at least meeting with a lawyer to make sure you're not getting yourself in over your head.

Pro Bono Legal Counsel

People with low income may qualify for legal aid programs, which provide attorney representation in simple matters at low cost or no cost, or even pro bono representation, which is free. Your city or county will have a legal aid program of some time, and most of these programs assist with bankruptcy.

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About the Author

A Durham, NC resident, Fraser has written about law, starting a business, balancing your budget and fighting evictions, among other legal and financial topics.