Can I File Bankruptcy For Free When I am Too Broke To Get bankrupt?

Bankruptcy is a difficult time and particularly for low-income people that always leads to lots of stress. When low-income people face financial crises, the implications are huge: a wage garnishment can send a worker back to dependency on public benefits—or back to homelessness; an illness or job loss can mean eviction or home foreclosure. Filing bankruptcy can be a costly process. Many people wonder if they can file bankruptcy for free. This is a tricky question and one that may not make some people too happy. Read on to learn the answer to – Can I file bankruptcy for free?

The New Laws

The new bankruptcy laws have added more cost to filing bankruptcy, much to the dismay of filers. The new laws require you to take credit classes. These classes are not free and for someone with severe financial issues they can be more than they can afford. Because the stakes are so much higher for the poorest debtors, the drafters of the 2005 Bankruptcy Reform legislation included provisions to limit that Act’s impact on these debtors.

Most people will have to pay for the classes which average around $60. Some people, though, may be able to get them for free. It is possible to have your bankruptcy education classes waived as well. If you have an attorney form a free legal aid program or you are otherwise proven to be low income then you can get the classes for free through a waiver program, but again, you will need to fill out forms providing information that shows you just can’t afford to pay the cost of the class.

Legal Representation

It is very important that a bankruptcy case be filed and handled correctly. The rules are very technical, and a misstep may affect a debtor’s rights. For example, a debtor whose case is dismissed for failure to file a required document, such as a credit counseling certificate, may lose the right to file another case or lose protections in a later case, including the benefit of the automatic stay.

Bankruptcy has long-term financial and legal consequences – hiring a competent attorney is strongly recommended. Rarely do attorneys give their services away, but some offer pro bono work for low income clinics. So once again it is possible, but not the standard. This can get expensive. There may be an option for free legal counsel through a state program. You may end up having to go on a waiting list, though. For the majority of people free legal counsel just will not be available.

Filing Costs

There is no way to get past the costs of filing the bankruptcy case in court. Everyone must pay. There is, however, an option that may allow you to get your fees waived, but this is very rare and most people must pay upfront or through a payment plan. Applying for a charge waiver in the court will discharge you the $299 payment that you should have submitted by funds or money order. The filing charge must be fully paid out when your papers are filed. Some Personal bankruptcy Courts permit you to pay this fee throughout installments.

So, the answer to the question – Can I file bankruptcy for free? – is probably no. Unless you are very low income your chances for getting the credit classes, a free attorney and your fees waived is not very good. In general you will have to pay something. It can vary, but the credit classes and filing costs alone are going to be about $300. Attorney fees vary greatly, or you may be looking at another $500 t0 $700 or even more. There is good and bad news when it comes to the question “Can I file bankruptcy for free?” The good news is yes this is possible. According to the bankruptcy code, any debtor whose income is below 150% of the official applicable poverty line for their state and family size, can qualify to waive the bankruptcy filing fee.

To determine if you qualify You would need to take your current annual income divide it by the applicable poverty line amount. If the answer is less than 1.5 you would qualify. You will have to provide proof of your income to the court. Bankruptcy is not cheap. That is why there are some special programs for low income people that help take the cost down or eliminate them. So, the true answer to ‘Can I file bankruptcy for free’ is actually yes – you just have to meet the special requirements.

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