If you can’t afford to pay a bankruptcy attorney right away, you might consider:
These are a few ways to file for bankruptcy when you're low on funds. Keep reading for more details.
Your attorney won’t file a Chapter 7 case until you’ve paid in full. Why? Because the bankruptcy would wipe out the fees still owed to your attorney. A debtor who doesn’t have the fee will often start by asking friends and family for help.
If that isn’t an option, qualified Chapter 7 debtors will stop making bill payments if the obligation will be discharged (wiped out) in the case. Then they use the money for legal fees. While this might seem sketchy, rest assured that the court understands and expects filers to use this approach. But it’s essential to be sure that you’re qualified because it can be difficult—if not impossible—to catch up on bills if you find out you don’t qualify later.
It isn’t as challenging to finance a Chapter 13 case. Many attorneys will take a downpayment upfront. The remaining amount gets paid in your repayment plan, thereby allowing you to pay a small part of your legal fees each month.
Find out more about how bankruptcy lawyers get paid.
If you can’t afford a bankruptcy attorney, you might find help at a local legal aid society or a free legal clinic. Legal aid societies have both staff and volunteer attorneys to help meet the legal needs of low-income individuals in the community. If you have a legal aid society nearby, check to see if it has a bankruptcy department.
Also, some bankruptcy courts offer free legal information or clinics to help debtors filing without an attorney. Or your court might provide information regarding other free services in your area.
Learn more about finding bankruptcy lawyers.
It’s common in the legal profession for attorneys to provide a certain amount of free (pro bono) services to low-income individuals. And many bankruptcy attorneys cut fees drastically for clients who qualify for a bankruptcy fee waiver.
To find a local pro bono attorney, consult with different lawyers in your area or contact your county or state bar. Or visit the American Bankruptcy Institute's Bankruptcy Resources webpage.
You don’t have an attorney to file for bankruptcy. But it isn’t always a good idea to go it your own, either. Whether it would be in your best interest to hire a lawyer typically depends on:
In many cases, if you have little or no income or property, you might be able to file a successful Chapter 7 bankruptcy on your own. The instructions on the official bankruptcy forms are straightforward, which makes them relatively simple to complete. However, the forms don’t explain what will happen in your case.
You’re expected to understand the ramifications of filing, such as whether you’ll lose particular property or whether a previous transaction, such as a car sale, might be unwound. As a result, filing for bankruptcy without an attorney requires conducting extensive research. Many filers start by learning how to protect property using state and federal exemption laws.
You’ll need to become knowledgeable on federal bankruptcy laws, and the rules and procedures of your local bankruptcy court. For instance, Chapter 7 and 13 each have different qualification requirements and benefits. You’ll need to be sure to choose the best chapter for you.
Also, you must turn over supporting documents—like tax returns, paycheck stubs, and bank statements—and represent yourself at all mandatory hearings. If you don’t put in the time and effort into researching all necessary laws, rules, and procedures, you risk having your case dismissed without a discharge or losing your property.
Even so, it’s still possible to represent yourself in Chapter 7. If you’d like more information on filing on your own, an excellent place to start is with a comprehensive do-it-yourself manual, like Nolo's How to File for Chapter 7 Bankruptcy, by Cara O’Neill & Albin Renauer.
If you have a complicated Chapter 7 bankruptcy or if you are considering filing a Chapter 13 case, you’ll want to hire an attorney. These types of bankruptcy cases have many pitfalls for self-represented debtors and are a lot harder to complete on your own. In fact, most attorneys who don’t practice bankruptcy law regularly will not file bankruptcy cases. There’s too much risk of making an error.
Even though it’s possible to handle your own Chapter 7 bankruptcy, bankruptcy is a complicated area of law, and many filers find it challenging to avoid unexpected pitfalls. Even if you can’t afford an attorney, it’s in your best interest to talk to a knowledgeable bankruptcy lawyer before filing your case. Most attorneys provide free consultations and can provide you with valuable information about the bankruptcy process, the type of bankruptcy you should file, and the problems you could face.
If you’re considering filing for Chapter 13, representation is a must. The courts strongly recommend hiring an attorney because the vast majority of filers are unable to complete a Chapter 13 plan without help.
Get ready for your consultation by preparing questions to ask the bankruptcy attorney.