If I Can't Pay Bills and Can't Afford Bankruptcy, What Are My Options?

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If you can't afford to file for bankruptcy, there is help available.
If you can't afford to file for bankruptcy, there is help available. (Image: Jupiterimages/Photos.com/Getty Images)

Not having money to either pay your bills or file for bankruptcy puts you in a tough position. Eventually creditors may file lawsuits against you, winning court judgments and possibly garnishing your bank account or wages. That is a hard way to live, and you are better off finding a way to file for bankruptcy, even if you can't afford to do it.

Fee Waivers

Chapter 7 is the simplest form of bankruptcy and is perfect for quickly eliminating unsecured debt such as credit cards. The filing fee is $299 as of 2011, but people who cannot afford to pay are eligible for a waiver, allowing them to file bankruptcy for free. Eligibility is determined after a review of your financial situation. However, Chapter 7 is not open to everyone. Income limits vary by the state and usually only people with lower incomes qualify.

Installment Plans

Chapter 7 and another popular form of bankruptcy, Chapter 13, also offer installment plans for the filing fee. People who do not qualify for Chapter 7 can opt for Chapter 13, which takes three to five years to complete. Chapter 7 is usually completed in just months. The filing fee for Chapter 13 is $274, with the installment plan making it affordable for most people even if they have to sell household goods to raise the cash.

Free Legal Representation

Some nonprofit organizations such as Legal Aid offer free help from local bankruptcy attorneys for those who cannot afford a lawyer. Some people who qualify under the income guidelines choose Chapter 7, receive a waiver of the filing fee and then secure a free attorney through Legal Aid.

Self Representation

It is also possible for people to represent themselves in bankruptcy, although the United States Bankruptcy Court warns against it. The court notes that bankruptcy is often overwhelming for people without a legal background, and that mistakes are commonly made by people representing themselves. However, qualifying for a fee waiver or installments and choosing self-representation is sometimes preferable to not filing at all and possibly being subjected to judgments and garnishment.

Getting Help

People overwhelmed by debt without an ability to pay should seek counseling from a government certified counselor, such as those affiliated with the U.S. Department of Housing and Urban Development. Or take a free initial consultation with a bankruptcy attorney. A for-profit attorney will not represent you for free, but you can use the free consultation to learn about the bankruptcy process and whether you qualify for Chapter 7 or Chapter 13. The local public library can provide local contact information for government-certified credit counselors.

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