What to Do if You Need to File Bankruptcy But Can't Afford it
If you file a consumer bankruptcy, even the United States Courts recommend that you hire an attorney and that costs money. Filing fees are an additional expense. Even though you are probably filing bankruptcy because you don't have much money, there are strategies you can use to come up with the funds needed to get your bankruptcy discharge.
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Stop Paying Creditors
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Typically, if you are considering bankruptcy, you are having trouble making even the minimum payments on your consumer debt. One way to raise money to afford bankruptcy is to simply stop paying your unsecured creditors, such as your credit card companies. Once you fall behind in your payments, creditors will generally try to work with you for months before they threaten or actually proceed with a lawsuit. In the meantime, you can save the money you had been paying them to create a savings fund for your bankruptcy expenses. It makes little sense to keep paying creditors when you know you are going to file bankruptcy and discharge the debt.
File Pro Se
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While the thought of facing the bankruptcy court on your own without an attorney can be daunting, filing a case without hiring an attorney, or filing "pro se," can save you hundreds if not thousands of dollars. Bankruptcy is a complex process, but all of the information needed to file a case is public domain. You can visit your local bankruptcy clerk or the United States Courts website to obtain all necessary forms and learn bankruptcy procedure. If there are no irregularities in your case, it may even prove easier than you feared. However, filing bankruptcy incorrectly could have long-term consequences, so you should make sure you are fully confident in this process before you save the money on an attorney. Filing a bad case could ultimately cost you more than hiring a good attorney in the first place.
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Find Pro Bono Attorneys
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When you begin the bankruptcy process, you should visit a few bankruptcy attorneys for help, as most offer free consultations. If you are financially unable to hire an attorney, certain attorneys may offer to take your case "pro bono," or for free. The American Bankruptcy Institute provides a nationwide tool to help you locate attorneys and institutions that offer pro bono services. You could also visit your local bankruptcy clerk to see if they have any resources to help you find local pro bono legal services.
Sell Assets
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If you are truly in dire straits and cannot locate any free legal services, you may have to sell some of your assets. Although you may not want to part with your possessions, if it means that you can receive a discharge of your debts in return, it may make financial sense. You can also draw from any retirement savings you have, although this should be a last resort.
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