Chandra Wants to Know How to File Bankruptcy For Free


“Dear Steve,

My mom is 56 years old and disabled and has credit card debt she cant afford to get a lawyer to file bankruptcy is there any way she can file for free and eliminate this debt.


Dear Chandra,

Many people are surprised that there are fees involved to go bankrupt and not just for a bankruptcy lawyer. As ironic as it sounds, you do need money to go bankrupt at least to pay the fees levied by the bankruptcy court. But there is a way to go bankrupt for free.

However, many people don’t know that the bankruptcy court may agree that the fee for filing bankruptcy can be paid in four installments.

A voluntary petition by an individual shall be accepted for filing if accompanied by the debtor’s signed application stating that the debtor is unable to pay the filing fee except in installments. The application shall state the proposed terms of the installments and that until the filing fee is paid in full, the debtor will not make any additional payment or transfer any additional property to an attorney or any other person for services in connection with the case.

The clerk shall enter, on behalf of the judge to whom the case is assigned, an order granting leave to pay the filing fees providing the following terms of the agreement have been met:

  1. the full filing fee shall be paid in four equal installment payments;
  2. the first installment payment is to be paid within 30 days, and at least half of the filing fee must be paid within 60 days of the filing of the petition;
  3. the final installment payment shall be payable not later than 120 days after filing the petition.

While that approach does not allow you to file bankruptcy for free, it does allow you to file and to lessen the cost of filing by spreading it out over several months.

If your mother’s income is less than 150% of the poverty level in her area she may be eligible for a complete waiver of Chapter 7 bankruptcy filing fees by filing out this form and submitting it with her bankruptcy petition. For federal poverty level information, click here.

But there is yet another hurdle, before you mom can go bankrupt she needs to complete a debtor education course from a credit counseling group. Typically there is a charge for this course but groups like Hummingbird Credit Counseling will waive the fee as long as the bankruptcy court agrees to waive their fee.

The necessary bankruptcy forms and instructions are available online for free as well. They can be completed online, printed out and submitted to the court.

How to File Bankruptcy for Free

So if the income is less than or equal to 150% of the federal poverty guidelines here is the process of filing bankruptcy for free.

  1. Complete the waiver of bankruptcy petition filing fees.
  2. Complete Chapter 7 bankruptcy forms.
  3. File the waiver and bankruptcy petition with the court.
  4. If the court allow the bankruptcy fees to be waived, show the proof of this to the credit counseling group to be eligible for a free certificate for the bankruptcy to go forward.

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Do you have a question you'd like to ask me for free? Go ahead and click here.
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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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