How Can I File Bankruptcy If I Can’t Afford My Bills?

At networking events, often tongue-in-cheek, I’m asked “How do you get paid as a bankruptcy attorney?”

To the sarcastic out there, my response is “I get paid up front.” For those who sincerely ask that question (and I assume it would be most of you still reading this post) there are 5 ways to pay for a bankruptcy case: (1) pay in installments, (2) borrow from friends or family, (3) seek pro bono or legal aid, (4) file an application with the bankruptcy court to waive the filing fee, or (5) file yourself or through a bankruptcy preparation service.

My firm allows our clients to pay our fee in installments. While we are unable to advise a client to stop paying a debt that is valid and current, if we know the bankruptcy is unavoidable, one way to make payments to us is to pay us instead of paying minimum credit card payments. We want to avoid being another monthly bill, but typically clients are able to pay us over 3 or 4 month’s time. We are unable to file the case unless or until we are paid in full.

Obviously, borrowing from friends or family is tough because a bankruptcy can be embarrassing. The other issue that comes up is whether your family is giving you a loan or a gift, which are treated differently in bankruptcy court. One thing to remember is that the bankruptcy code allows you to repay any debt, even debts that are discharged. Therefore, after the bankruptcy is over and closed, a debtor could agree to repay family or friends.

Most areas of the Country have pro bono clinics that are designed to help people file for bankruptcy on their own. These clinics are normally staffed by student volunteers overseen by licensed attorneys, or maybe attorneys who are volunteering their time. Attorneys are also encouraged to take on a certain number of pro bono hours each year. Here in the Tampa Bay Area, we have a Pro Se Clinic which is available at the Tampa Bankruptcy Court, with no appointment needed. The Clinic is staffed by attorneys volunteering their time to help. The attorneys are unable to help you file a case, but they are available to help with questions related to cases already filed in the bankruptcy court.

Bankruptcy Court allows you to file an application In Forma Pauperis, which is a latin term defined as “in the character or manner of a pauper.” The Court will allow you to waive the filing fee if you can show that you have no money and no assets against which to pay the filing fee. In some cases, rather than waiving the fee, the Court will allow you to pay in installments.

The Bankruptcy Court does allow non-attorney petition preparers to complete and file the bankruptcy petition for you. Typically, these petition-preparers are much cheaper than an attorney. Be careful, however, because you get what you pay for. The petition-preparer will only complete and file the petition. The will not make any amendments to the petition after it is filed, and they will not (cannot) appear at any hearings. Most of the pro se clinic people I speak with filed using the help of a bankruptcy petition-preparer.

If you feel like you need to file bankruptcy but are unsure how to afford it, we provide a free consultation and can go over all of your options with you.

For more information on bankruptcy, please subscribe to the Crushing Debt Podcast, on iTunes, Stitcher and GooglePlay. If you prefer, please contact us to schedule a free initial consultation to discuss your options at 727-261-0224 or email me directly at shawn@yesnerlaw.com.

Shawn M. Yesner, Esq., is the host of the Crushing Debt Podcast and founder of Yesner Law, P.L., a Tampa-based boutique real estate and consumer law firm that helps clients eliminate the financial bullies in their lives. We assist clients with asset protection, the sale and purchase of real property, Chapter 7 liquidation, Chapter 13 reorganization, bankruptcy, foreclosure defense, debt settlement, landlord/tenant issues, short sales, and loan modifications in Tampa, Westchase, Odessa, Oldsmar, Palm Harbor, Clearwater, Pinellas Park, Largo, St. Petersburg, and throughout the greater Tampa Bay area.