How to Save Money on Bankruptcy Chapter 7
Filing a Chapter 7 bankruptcy petition is a serious financial step with long-lasting consequences. If you are considering filing a Chapter 7 bankruptcy, you are probably in a difficult financial position, with little or no money to pay creditors. As a result, saving money during the bankruptcy process becomes paramount. Unfortunately, court-filing fees for a Chapter 7 are $299, and attorney fees can easily range from $1,500 to $3,500. Depending on your situation, you may be able to avoid or eliminate both of these expenses.
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Instructions
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File a fee waiver with the court. If you are a low-income individual, the United States Bankruptcy Court will allow you to petition for a waiver of the $299 filing fee. According to the bankruptcy statues, you must have income of less than 150 percent of the federal poverty level for a family of your size, and you must not be able to pay the fee in installments. You have the burden of proving to the court your inability to pay.
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Visit as many bankruptcy attorneys as you can. Most bankruptcy attorneys offer a free consultation, so use this opportunity to explain your case and learn as much as you can about the bankruptcy process. Each lawyer may have a different perspective on how the law applies to your case, so speak with as many as is practical.
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Get a copy of both federal and local bankruptcy rules. Bankruptcy is a federal procedure, but the government allows individual states to develop their own specific procedural rules. For example, an individual court district might require an additional form that other districts do not require, or it may require information such as the matrix of creditors formatted on a computer disk instead of on paper.
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Learn about exemptions. Bankruptcy procedures allow you to protect some of your property from liquidation in a Chapter 7 bankruptcy, but only if you cite the specific exemption law when you file your bankruptcy petition. Understanding what you can and cannot protect can save you hundreds or thousands of dollars, depending on the type and amount of assets you own.
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File your bankruptcy petition pro se, which is representing yourself without an attorney. Once you have learned enough about the rules of bankruptcy procedure, you can file your bankruptcy petition without the help of an attorney. The court will hold you to the same standards as any attorney, so review your petition repeatedly until you are sure you have complied with all federal, state and local rules. Failure to comply with all rules can result in your case getting dismissed.
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