What Happens When a Person Cannot Afford to Pay for a Chapter 7 Bankruptcy Filing

By the time people are finally ready to hire Chapter 7 Bankruptcy Attorneys, the finances may be in such dire straits that they cannot even afford to file. They have no credit left or allowed on their cards anymore, and no way to take out a bank loan. Their savings accounts are depleted. Typically, the person must pay the lawyer for the filing fees before this part of the process can move forward. The individual must figure out a way to come up with the money.

Chapter 13 vs. Chapter 7

In Chapter 13 filings by Bankruptcy attorneys, fees can be included in a debt repayment program set up to last for up to five years. In contrast, Chapter 7 is designed to wipe out qualifying debts, and that would include attorney fees. Obviously, a lawyer will not do this work if the payment would be discharged in the very bankruptcy petition he or she set up.

In some instances, courts will allow the petitioner to pay filing fees in installments. Although that does not address the lawyer's fee, it can help ease the immediate burden.

Inadvisable Strategies

One very inadvisable way to get the money is to take out a payday loan or a vehicle title loan. Because the money would be borrowed in such a close time to the bankruptcy filing, these loans would be ineligible for inclusion in Chapter 7. The person would risk losing the car or being sued by the payday lender if he or she were to default.

Asking for Donations and Loans From Family

Many of the ways the person could obtain cash for a lawyer may seem very unpleasant, and actions that this man or woman has been avoiding. Nevertheless, with a Chapter 7 bankruptcy can free someone of thousands of dollars of debt, allowing them a new start. With this in mind, the person might finally ask a close friend or family member for a loan. A GoFundMe page might be started.

Payments to Stop Making

If the person is still attempting to catch up on past-due credit card payments or payments to collection agencies, it's probably time to stop. This can free up cash to pay the lawyer and wipe out all of that debt. The bills to concentrate on are ones that could cause major disruption if the payments were to stop. Keeping up with car payments is more important than paying collection agencies, for example.