Why you need a lawyer to file for bankruptcy—and how to get one for free. Are you Too Broke To Go Bankrupt?
Many cash-strapped Americans, overloaded with debt, will not be able to afford to file for bankruptcy this year. Anywhere between 200,000 and 1 million consumers are estimated to be unable to come up with the $1,500 average cost to pay for the filing and lawyer fees for a Chapter 7 bankruptcy, according to recent research submitted to the National Bureau of Economic Research.
Today, the Chapter 7 filing fee by itself, without attorney fees, is around $300 and $280 for a Chapter 13, according to the United States Bankruptcy Court. You can, however, get the fee waived if your household income is less than 150 percent of the income poverty line.
In terms of affording the lawyer fees, experts recommend seeking out pro bono attorneys. You can do this by contacting your local legal-aid society, which should be able to refer you to a low-cost or free service in your area.
You can also use the American Bankruptcy Institute’s Pro Bono Locator to find free bankruptcy attorneys near you.
When consulting a lawyer, Robert Lawless, a law professor at the University of Illinois who specializes in bankruptcy, says it’s important to find an attorney who will not only help you file for bankruptcy but also try to solve your debt problems. He says, “The attorney should talk about your goals and look at what all of your options are.” Another low-cost resource is the National Foundation for Credit Counseling, which provides affordable financial services to help people manage their debt.
Options If You Can’t Afford a Chapter 7 Bankruptcy Lawyer
Many debtors are unable to afford the fees charged by attorneys for Chapter 7 bankruptcy. While many attorneys offer payment plans, they will not file your case until all fees are paid in full. This means that you will not have bankruptcy protection against creditors while you are trying to pay your attorney fees. If you can’t afford a Chapter 7 bankruptcy attorney, consider:
- filing on your own
- obtaining assistance from a free clinic or legal aid society in your area
- finding a pro bono attorney, or
- filing for Chapter 13 bankruptcy to pay attorney fees through your repayment plan.
Free Clinics and Legal Aid
There are many resources available to debtors who can’t afford a bankruptcy attorney. Some bankruptcy courts have free clinics to help debtors file for bankruptcy relief on their own.
Contact your bankruptcy court to find out about the services it offers. Even if your local court does not have a free clinic, it may provide you with a list of free services or programs available in your area.
In most states, there are legal aid societies that have attorneys who provide free legal services or assistance to low-income individuals. However, the services provided vary by each office. Contact your local legal aid society to find out whether it offers assistance to debtors who wish to file for Chapter 7 bankruptcy but can’t afford an attorney.
Pro Bono Attorneys
In addition to free clinics and legal aid societies, many attorneys take on a certain number of pro bono (no fee) cases. If you have little or no income, contact local bankruptcy attorneys in your area or your state bar attorney referral service to find attorneys who provide pro bono services.