Fortunately, there are other ways to make this happen:
Seek a Pro Bono Lawyer
You’ll find that there are currently lots of pro bono or for free lawyer services out there that can aid you with the application process. Pro bono lawyers can be accessed through the American Bankruptcy Institute or the local legal-aid in your area. The internet should also provide excellent help in finding lawyers who would be happy to take your case for free. If this is not possible, you might be able to find attorneys who provide reduced rates for their services.
Chapter 13 Bankruptcy Plan
A Chapter 7 Bankruptcy plan lets you discharge all allowable debts while a Chapter 13 essentially lets you set up a more budget-friendly repayment plan. If you’re thinking about applying for a Chapter 13 Bankruptcy, then you can simply include the lawyer’s fees in the repayment plan. This allows you to pay the attorney in small amounts – together with the rest of your debts – until such is paid completely. Many bankruptcy lawyers allow this and in most cases, this actually ensures that they’ll work harder to ensure that your bankruptcy application would be approved. After all, non-approval under Chapter 13 means that no allocation for professional fee repayment will be made. Of course, this is still entirely dependent on the kind of contract you and your lawyer would agree on.
File for Bankruptcy Yourself
The last option is to file for bankruptcy yourself which is inarguably the most cost-effective plan if you’re too broke to pay an attorney. Bear in mind though that with or without a lawyer, you would still have to pay for the filing and application fees of bankruptcy. These are expenses you cannot escape since they are mandated by law.
Fortunately, the filing fees aren’t that expensive. Furthermore, the procedure for bankruptcy application is simple enough after careful study. Legal aids also offer procedural help for those who want to file for bankruptcy on their own. Here’s an overview of how your DIY bankruptcy application should go:
- Determine whether you meet the mandatory standards for declaring bankruptcy. Essentially, the courts will determine whether you’re really incapable of paying off your outstanding debts through your remaining assets. Typically, Chapter 7 Bankruptcy is fueled by instances when a person becomes completely incapable of earning an income. In Chapter 13 Bankruptcy, an applicant typically has a source of income and only applies for debt consolidation.
- Note that Chapter 7 standards vary from one person to another. It depends largely on the type of household you maintain, the expenses you have, the liabilities, and the assets or income you currently have.
- Mandatory credit counseling is also required which you’ll have to pay for. These costs usually $20 to $50 although it’s possible to have the fees waived if you are unable to pay.
- Download the forms online and fill them in. This is the point where the help of a legal aid would be indispensable. At this stage, you’ll have to make sure that all information needed is filled so that they wouldn’t be sent back to you. Take your time in checking and rechecking the information before you send it to the proper authorities.
- Necessary paperwork often includes list of creditors you currently have, the amount of debt you owe, any interests attributed to the debt and so on. Your income, cash on hand, and current assets should also be included in the documents.
- Take a good look at the bankruptcy code to find out which assets are exempt from liquidation. There are several properties that you can keep safe from creditors so that you’ll have a solid baseline for your new financial freedom. Include these in the document and try to be as extensive as possible. Please note that any sign of fraud can ruin your chances at having your application approved.
- File your application in the court where you live and monitor the proceedings constantly. The great thing about filing for bankruptcy is that upon submission, your creditors will be notified of your intent and are barred from contacting or harassing you to pay the debt.
- Attend the creditor’s meeting when asked for. This is the situation wherein the creditors may do their best to prove that granting your bankruptcy is not necessary. Hence, you must come armed with all the information you can provide to prove that your claim should be granted.
- You’ll be asked to go through a Financial Management Instruction Course – also mandatory. This is often done after filing and will cost roughly $50. The point of this course is to give you sufficient knowledge to ensure that the same thing won’t happen again.
- Follow up and file motions to object if necessary. Once your application is approved, you can put yourself back in the right track.
Ideally, you should file for bankruptcy yourself if you’re aiming for a Chapter 7 and have no circumstances that could complicate the application. The presence of complications will definitely be a point against your favor, reducing the likelihood of approval. If your case if fairly straightforward however, you can file for bankruptcy yourself by following the above-given process.
What makes bankruptcy application seem difficult is the fact that applicants need to fill in numerous forms and submit them to various agencies before getting a positive feedback. In most cases, applicants would be asked to resubmit papers or fill in lacking information, thereby making the process that much longer. This is largely where the value of lawyers becomes evident. With an attorney by your side, the possibility of returned application forms and errors would be minimized, therefore creating a faster and more streamlined process. The experience of a lawyer would also help guarantee a favorable decision since they’d be able to present your case in the best way possible.