Cheapest Way to File Bankruptcies Without a Lawyer
Explore practical, low-cost strategies for managing bankruptcy filings independently, with guidance on minimizing expenses and accessing support.
Filing for bankruptcy can be a path to financial recovery, but the associated costs can seem daunting for those already struggling. While hiring an attorney is common, it is not always feasible, leading many to seek more affordable ways to navigate the process.
Several options exist to reduce or manage bankruptcy expenses. Understanding court-approved payment methods and community-based support can make this legal procedure more accessible.
Filing on Your Own
Individuals have the right to file for bankruptcy in federal court without an attorney, a process known as filing “pro se,” or “for oneself.”1United States Courts. Filing Without an Attorney Choosing this route primarily saves on legal fees, which can be substantial, but it does not eliminate all costs.
Filers proceeding without legal representation must still pay mandatory court filing fees. These fees cover the court’s administrative costs for processing the case. Beyond the filing fee, the main task for a pro se filer is accurately completing extensive paperwork using official bankruptcy forms. These forms require detailed information about assets, debts, income, expenses, and recent financial history, supported by documents like pay stubs, tax returns, and bank statements.
Successfully filing pro se requires understanding federal bankruptcy law, procedural rules, and local court requirements. Filers are held to the same legal standards as attorneys, needing to grasp concepts like property exemptions—which protect certain assets—and meet strict deadlines for documents and mandatory meetings, such as the meeting of creditors. Court staff cannot provide legal advice, placing the full burden of correctly interpreting and applying complex rules on the filer. Errors or missed deadlines can lead to serious consequences, including case dismissal or the denial of debt discharge, potentially undermining the goal of a financial fresh start.
Court Payment Installments
The federal bankruptcy system offers a way to manage the upfront cost of court filing fees. Individuals filing for bankruptcy, primarily under Chapter 7, can ask the court for permission to pay the required filing fee in installments instead of a single lump sum when the case begins.2Legal Information Institute. Rule 1006. Filing Fee | Federal Rules of Bankruptcy Procedure
To use this option, the filer must submit a formal application, typically Official Bankruptcy Form 103A, “Application for Individuals to Pay the Filing Fee in Installments,” along with their initial bankruptcy papers. The application requires declaring an inability to pay the full fee upfront and proposing a payment schedule, usually limited to a maximum of four installments.
The court reviews the application. If approved, the court issues an order detailing the amount and due date for each payment. Generally, the entire fee must be paid within 120 days after filing the bankruptcy petition, although the court may grant an extension up to 180 days for good reason. All filing fee installments must be paid before any payments are made to an attorney or other professionals assisting with the case.
Failure to make installment payments on time can have significant repercussions. If a filer misses a payment without securing a court extension, the judge may dismiss the bankruptcy case.3United States Courts. Guide to Judiciary Policy, Vol. 4, Ch. 8 – Bankruptcy Case Policies Dismissal removes the protection of the automatic stay, allowing creditors to resume collection efforts, and could affect future bankruptcy filings. Strict adherence to the court-ordered schedule is essential.
Pro Bono Resources
For those unable to afford attorney fees, free legal assistance, known as “pro bono” representation, is another possibility. Various organizations connect low-income individuals with volunteer attorneys willing to handle bankruptcy cases without charge.
Resources often include the Legal Services Corporation (LSC), a federally funded non-profit supporting local legal aid organizations nationwide, many of which offer bankruptcy help. The American Bar Association (ABA) and state or local bar associations also run pro bono referral programs. Additionally, federal bankruptcy court websites often list local pro bono services.
Eligibility for pro bono assistance is typically based on financial need, with programs screening applicants based on household income, often using a percentage of the federal poverty guidelines. Applicants usually need to provide financial documentation. Meeting the criteria does not guarantee representation, as demand often exceeds the availability of volunteer attorneys.
If matched with a pro bono attorney, an individual receives comprehensive legal support throughout the bankruptcy process. This includes preparing documents, advising on legal issues, representing the filer at meetings and court appearances, and communicating with the trustee and creditors. While the attorney’s services are free, the client generally remains responsible for the court filing fee and potentially minor costs, unless a fee waiver is obtained separately.
Low-Fee Legal Clinics
Low-fee legal clinics offer a middle ground between filing alone and seeking free representation. These clinics provide legal assistance from attorneys or supervised law students at reduced rates compared to standard private lawyers. They serve individuals who may not qualify for pro bono help but cannot afford typical market rates.
These clinics are often associated with law schools, bar associations, or independent non-profit organizations. Law school clinics, for example, offer practical training for students under faculty supervision, enabling lower-cost services. Many focus on areas like consumer bankruptcy.
Services offered by low-fee clinics can vary. Some provide full representation, while others offer “unbundled” or limited scope services, where clients hire the clinic for specific tasks like reviewing paperwork, advising on exemptions, or representation at a single meeting. This allows filers to pay only for the help they need.
Fee structures aim for affordability, often using a sliding scale based on income and household size, potentially serving those with incomes above pro bono limits but below a certain threshold relative to federal poverty guidelines. Some clinics charge modest flat fees. Clients are generally still responsible for paying the mandatory court filing fees, unless they qualify for a waiver or installment plan. These clinics bridge a gap by providing more affordable professional legal support.
Non-Profit Credit Counseling
Nearly all individuals seeking bankruptcy relief must complete a credit counseling session from an approved non-profit agency before filing.4Legal Information Institute. 11 U.S. Code § 109 – Who May Be a Debtor This requirement, mandated by federal law, ensures people explore alternatives before committing to bankruptcy. The counseling must occur within 180 days before the bankruptcy petition is filed. Failure to complete this step can lead to case dismissal.
The counseling session, typically lasting 60-90 minutes online or by phone, involves reviewing the individual’s financial situation, including income, expenses, and debts. A counselor discusses potential alternatives, like debt management plans, though agreeing to one is not required. The goal is to help the filer make an informed decision.
Individuals must use a credit counseling agency approved by the United States Trustee Program (USTP), which oversees bankruptcy cases in most areas. The USTP maintains a public list of approved agencies on the Department of Justice website.5United States Department of Justice. U.S. Trustee Program | List of Credit Counseling Agencies Approved Pursuant to 11 U.S.C. § 111 Upon completion, the agency issues a certificate, which must be filed with the bankruptcy court.
Approved non-profit credit counseling agencies must offer services for free or at a reduced fee to clients unable to pay the standard cost, typically if household income is below 150% of the federal poverty guidelines. Standard fees are often modest, usually $15 to $50. Fee waivers ensure this mandatory step does not block access to bankruptcy relief. Individuals usually request a waiver and provide income proof before starting the course.
Budgeting for Filing Costs
Creating a budget is essential when preparing for bankruptcy, particularly without an attorney. The primary mandatory cost is the court filing fee, set by federal law.6GovInfo. 28 U.S. Code § 1930 – Bankruptcy Fees As of current schedules, the fee for Chapter 7 bankruptcy is $338, and for Chapter 13, it is $313. Identifying this cost provides a clear savings target.
Budgeting effectively also involves understanding potential cost reductions. For Chapter 7 filers, federal law allows applying for a waiver of the filing fee using Official Bankruptcy Form 103B. Eligibility generally requires household income below 150 percent of the federal poverty guidelines and an inability to pay the fee even in installments. If a waiver is granted, this major cost is eliminated. If not, the full fee is due, though the court might permit payment in installments.
Another cost to budget for is the mandatory post-filing debtor education course. This financial management course is required for receiving a debt discharge in both Chapter 7 and Chapter 13. It must be taken from a provider approved by the U.S. Trustee Program, with lists available online. Course fees are generally modest, often $10 to $50. Similar to pre-filing counseling, providers must offer fee waivers or reductions for those unable to pay, based on income relative to poverty guidelines.
With these costs identified—the filing fee (potentially waived or paid in installments) and the debtor education fee (potentially waived)—a savings plan can be developed. Strategies might include reducing non-essential spending, selling non-exempt personal property (after carefully considering bankruptcy rules), or using funds like tax refunds. Setting aside funds specifically for these costs helps ensure they can be covered, facilitating a smoother bankruptcy process.