Is it possible to file for bankruptcy for free?

The short answer is “Yes”, it is possible to file for bankruptcy for free, that is, at no cost to the filer. First, the costs of filing for bankruptcy include the court filing fee, which is currently $ 335.00 for a Chapter 7 case and $ 310.0 for a Chapter 13 case. These are mandatory court filing fees, however they can be waived.

For a fee waiver of bankruptcy court filing fees, at least here in the Central District of California, in some situations the court may approve a filing fee to be paid in installments or waived entirely. Note that if an installment payment plan is approved, the payment schedule must be met or the bankruptcy case may be dismissed without the debtor obtaining a debt discharge.

Chapter 13 petition package – In Chapter 13 bankruptcy cases, a filing fee is generally not allowed to be waived or paid in installments. The purpose of chapter 13 is to keep up with payments, and therefore if the filing fee is not affordable, the court will question the debtor’s ability to be successful in a chapter 13 case. 99% in Chapter 13 without an attorney, due to the complexity of a payment plan case.

Chapter 11 petition package – In Chapter 11 bankruptcy cases, fee waivers or installment payments are generally not allowed. Here, as in Chapter 13, filing without a bankruptcy attorney will doom your case to failure, again, due to the complex nature of these cases.

Chapter 7 petition package – If a debtor files a Chapter 7 bankruptcy case and the debtor’s income is less than 150% above the HHS Federal Poverty Guidelines (which vary based on your family size), the court can fully waive the fee presentation or approve payments in installments. The debtor must submit a written request to the court and submit the application at the admission window of the Clerk’s Office at the time the bankruptcy application is filed. The intake staff will contact the judge to whom the bankruptcy case was assigned and the judge will make a decision as soon as possible. This may require the debtor to wait in court for a few hours if the judge is not immediately available, or the debtor may have to return the day after the court is open. Even if the court does not waive the filing fee, the court may allow a debtor to pay the filing fee in installments.

My understanding of the fee waiver program in our courts is that the judge’s position in deciding whether to waive the fee is as follows: You cannot get a fee waiver if you hire a professional to assist you in the preparation phase. of the petition. I agree with our courts that if you can afford to hire even a petition preparer at the maximum allowable fee of $ 200.00, then you can certainly afford the filing fee of $ 335.00.

In addition to the court filing fee, two credit counseling courses are required. You can usually get a fee waiver, if you are eligible as low income. You will have to ask for it, but this is also possible.

After that, the only additional costs are incurred if you hire a petition preparer who is not an attorney or if you hire an attorney to represent you in your bankruptcy case. Now don’t get me wrong, attorney-assisted bankruptcy filings tend to be much smoother than a case prepared without one, but that doesn’t mean it’s impossible.

Anyone looking to save money by filing for bankruptcy should consider whether they have anything to lose by doing it this way. Simply put, in Chapter 7 bankruptcy, the trustee’s job is to find assets to take to pay off your creditors. If you have assets to protect and are unfamiliar with how to properly protect them from the trustee’s take, then it would be wise to hire an attorney.

However, if you are truly low-income and have no assets to protect, then you are a prime candidate to file for bankruptcy on your own and get waivers for presentation and counseling course fees. In fact, here in the Central District of California, we just changed our forms, in the hope that it will be easier to submit. We also have Electronic Self-Representation (ESR), so you can handle all of this from the comfort of your home and file bankruptcy from your computer. As if that wasn’t enough, there are also self-help videos and a self-help table in most of our courthouses.

So if you have nothing to lose but time, then preparing your own bankruptcy case can save you money. It may even turn out better than if you found the cheapest bankruptcy attorney, paid them, and they ruined your bankruptcy case. Fear not, if you run into trouble or if you come across a disgruntled trustee asking you questions or recommending that you consult with an attorney, we are still here to help you and correct the record; for a fee.

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