Many people wonder if they would be able to file for bankruptcy for free or without paying the court filing fee. The answer is probably not, but sometimes. In order to file a bankruptcy case, a person must pay the court filing fee of $299 (for chapter 7). This fee goes to pay for court operating costs and to the trustee for overseeing the case. Under extreme circumstances, it may be possible to petition the court to waive the filing fee, but this is rare and requires the person filing the case to immediately have a hearing before the bankruptcy judge to explain why they would like the fee waived and why they can’t pay. Although it is rare that the court would waive the filing fee, it is possible if the debtor can show financial hardship. The problem is that everyone in bankruptcy is experiencing a financial hardship, so the story for the judge must be pretty compelling. In answering the question “Can I file for bankruptcy for free,” a person also must consider the cost of legal services, or cost of preparation of the bankruptcy petition itself. The way to have it for free is to represent one’s self in the bankruptcy process without an attorney. This is called “in pro per” or acting as one’s own attorney. There is no legal requirement that a person have an attorney, however as a practical matter, for the best result, it is a good idea. There are three common problems for people who file bankruptcy without an attorney:
1. Completing the bankruptcy forms properly can be difficult, and without the forms completed properly, assets that could have been “exempt” (meaning you’d be able to keep them) may not be listed properly and the trustee then has the ability to sell those assets and use the proceeds to pay creditors;
2. Creditors have an unrepresented party to collect from and this may result in some debts becoming non-dischargeable as the person would not know how to fight back to protect the dischargeablity of their debt.
3. It is often difficult to get the bankruptcy forms done right including the petition, schedules and statement of financial affairs and the person may have to make several trips to court to be amending the schedules and meeting with the trustee multiple times. There are some “legal aid” type organizations which are sometimes able to help debtors file bankruptcy without an attorney, which could eliminate some of the problems listed above. It doesn’t solve the biggest problem of having to represent yourself in court as your own attorney, but having a knowledgeable non-profit attorney help in the process can be beneficial. These organizations are typically overwhelmed with requests from consumers for help and it often takes many months or years before they have a chance to look at your situation. Meanwhile, creditors will be beating down your door to collect.
The concept of a free bankruptcy is great in theory, but difficult to produce in reality. The court costs are always there, and professionals who know what they’re doing charge for their services. Bankruptcy is something most people do only once in their life, it’s important it be done correctly the first time so the person filing can get maximum benefit and discharge their debts without major problems.