What Happens if You’re Too Broke to File Bankruptcy?

The fact that filing bankruptcy is a little on the expensive side is ironic. After all, most people who file bankruptcy are doing so because they are broke. What exactly does a person do if they need to file bankruptcy, but they are so broke they can’t?

Dealing with Attorney Fees

The biggest expense you have to deal with when filing bankruptcy is the attorney fees. Unfortunately, bankruptcy attorney fees are not set in stone by the court system. This means a bankruptcy attorney has the freedom to charge their clients as little or as much as they want. This does not, however, mean your attorney can just charge you whatever they feel like charging you. They do have to disclose a specific fee before you hire them.
There is no way to know how much you can expect a bankruptcy attorney to cost you because the truth is that it varies. It varies based on what kind of case you have as well as where you are currently living. It can also be more expensive if these are business debts instead of personal debts. The unfortunate truth is attorney fees for filing bankruptcy can fall anywhere between $500 and $5,000.

Did You Know That You Have to Take a Course Before Filing?

Before you can even file bankruptcy you are required to take a course on credit counseling. You can take this course online or you can go to a physical class. They also offer it over the phone and by email. There is a fee to take the course. Unfortunately, there is also a fee to file bankruptcy without taking the course.

Getting a Fee Waiver

They do offer fee waivers for individuals who are especially poor and/or disabled. This waiver will waive the fee for filing bankruptcy. In some cases, you can get the waiver to waive the fee for the credit counseling course that you have to take as well.
There are only two ways a person is considered poor enough to qualify for a fee waiver. You must have a medical hardship that prevents you from working or you must make 150 percent less than whatever the poverty line is for the state that you live in. As of May 2014, filing Chapter 7 costs $306 and Chapter 13 cost $286. Unfortunately, this means not qualifying for the waiver means you could end up needing as much as $5,306 to file bankruptcy depending on how expensive the attorney you hired is.
If you have questions about filing bankruptcy, please call our offices at (702) 381-6374.