If you are struggling with overwhelming debt, filing for Chapter 7 bankruptcy can provide you with relief. However, if you have limited finances, you will definitely be hampered by the cost of filing Chapter 7 bankruptcy because there are fees that you have to pay when filing Chapter 7 bankruptcy. Do not be sad, the good news is, you can file Chapter 7 bankruptcy without money.
Try going to a law firm that specializes in handling bankruptcy cases, debt relief, and other related matters. They will usually offer a free initial consultation to individual clients who are in need of help. They will surely provide effective legal solutions for you and help you file Chapter 7 bankruptcy without money.
Read also: Chapter 7 vs. Chapter 13
Filing Chapter 7 With No Money – Here’s Guide
Here is a guide to help you file for Chapter 7 bankruptcy with no money:
Determine Your Eligibility
First and foremost, you must find out whether or not you are eligible to file for Chapter 7 bankruptcy. Before you start the process of filling Chapter 7 bankruptcy, you can ask a bankruptcy attorney to determine whether you are eligible or not. You will need to pass a means test that compares your income to the median income in your state in order to qualify for Chapter 7 bankruptcy. You will qualify for Chapter 7 bankruptcy if your income is below the state median. However, if your income is above the median, you will most likely have challenges filing for Chapter 7 bankruptcy. Well, this is where the role of a Chapter 7 bankruptcy lawyer is needed. They will help you determine whether or not you meet the additional requirements.
Get Fee Waivers
You should know that there are court fees associated with filing bankruptcy, in addition to legal fees and other general fees. Therefore, it is often difficult for people to start the Chapter 7 bankruptcy filing process because of the costs involved. Well, a skilled and experienced bankruptcy attorney will certainly help you get a waiver of filing fees. Alternatively, if you cannot afford the fees, a bankruptcy attorney will also be able to help you get a waiver of the debtor education course fees. To help you qualify, they will file an application with the bankruptcy court and provide some documentation regarding your poor financial situation. Then, the bankruptcy judge will review your financial situation and determine whether you qualify for a fee waiver or not.
So, if you want to request a fee waiver, then you need to file an application with the bankruptcy court detailing your current financial situation including your expenses, income, debts, and assets. Then, the court will examine and review your application. After that, they will give a decision on whether you qualify for a fee waiver or not. Remember that to get a fee waiver, you must be able to show that you cannot afford the bankruptcy fees, based on your current income and expenses. Prove that your finances are really in a bad state where your expenses are greater than your income. Then, the court will use the means test again to determine whether you are eligible or not. As we said, the means test will consider your expenses, including housing, food, transportation, utilities, and other necessary living expenses.
It should be noted that although you are exempt from fees, before filing for bankruptcy, you will still have to provide all the necessary financial information to the court and attend credit counseling. Therefore, we can say that working with a bankruptcy attorney is a good idea. A bankruptcy lawyer will help you navigate through the process and increase your chances of getting the desired outcome.
Gather Your Financial Documents
The next step in filing for bankruptcy is to gather and provide the court with your detailed financial documents or information. A bankruptcy attorney will usually help you gather all relevant bankruptcy documents, such as tax returns, bank statements, credit card statements and pay stubs. So, make sure that you can collect all the necessary financial documents. If you have lost the forms or documents, ask a bankruptcy lawyer to help you obtain the documents from the issuing institution. That way, you can provide the court with your detailed financial documents.
Attend Credit Counseling
When you want to file for chapter 7 bankruptcy, you need to attend a credit counseling course with an approved agency. You will be able to search information about credit counseling courses from the Internet. Alternatively, you can also seek help from a bankruptcy attorney who can refer you to such agencies. A bankruptcy lawyer will also guide you through the process. Once you have attended the credit counseling course, the agency will give you a certificate of completion. Well, that certificate of completion is the certificate which must be included on your bankruptcy petition.
File Your Chapter 7 Bankruptcy Petition
Once you have collected all your financial documents and completed a credit counseling course, then you must prepare your Chapter 7 bankruptcy petition. And, file your Chapter 7 bankruptcy petition with the bankruptcy court. Once you file for the Chapter 7 bankruptcy, then the court is going to issue an automatic stay. That way, all collection activities against you will be stopped. It means that the creditors or debt collection agencies cannot contact you to collect debts or take legal action against you while your Chapter 7 bankruptcy case is pending. At least, now, you can breathe a sigh of relief from creditors who continue to collect your debts.
Well, the guide above is how to file Chapter 7 bankruptcy with no money. In the process of filing Chapter 7 bankruptcy, you can hire a bankruptcy attorney that can help you pass the process. For your information, according to Lawyer.com, the average cost for an attorney in Chapter 7 is $1,450. And, the typical costs nationwide range between $1,000 and $3,500. Of course, it is up to you to hire a bankruptcy attorney or not. To be sure, by following the above guidelines, you can file for chapter 7 bankruptcy without money. If you do not want to hire a bankruptcy attorney, then the total cost to file a Chapter 7 bankruptcy is $338, which consists of a $245 filing fee, a $78 administrative fee, and an additional $15 trustee fee.
Use Exemptions to Protect Your Property
When filing for bankruptcy, you will definitely feel a lot of worries. One of them is the worry of losing your property. The good news is that in Chapter 7 bankruptcy, you can use exemptions to protect your certain types of property. By using exemptions, you can keep some of your specific property such as your car, home, and personal belongings. It seems to be the way many people have done it so that they can keep some of their specific property by using exemptions.
However, unfortunately, exemptions do not apply to secured debts. By the way, what are secured debts? Secured debts are like mortgages and car loans. If you have secured debt, then you cannot use this exemption. To keep the secured property, you must continue to make payments on the debt. If possible, you can also negotiate a reaffirmation agreement with the creditor so that the creditor will retain your property as long as you continue to make payments on the debt.
Chapter 7 Bankruptcy Eliminates Most Unsecured Debts
You should know that Chapter 7 bankruptcy is specifically designed to eliminate most unsecured debts. For your information, unsecured debts are debts that are not backed by property. This includes unsecured debts such as credit card debts, personal loans, and medical bills. Chapter 7 bankruptcy can provide significant relief for those who are struggling to survive, make ends meet. If you successfully file for Chapter 7 bankruptcy, your debts will be wiped out. That way, you can get back to organizing your finances and start rebuilding your credit.
Keep in mind that Chapter 7 bankruptcy cannot eliminate all debts. Some types of debts that Chapter 7 bankruptcy cannot eliminate include tax debts, child support payment debts and student loans. Also, if you have secured debt, such as a car loan or mortgage, you will have to surrender the property to the creditor. If you want to keep the property, then you must continue to make payments.
Chapter 7 Bankruptcy Can Stop Wage Garnishment
Filing for Chapter 7 bankruptcy can stop wage garnishment. That means, if your wages have been garnished by creditors, then you file Chapter 7 bankruptcy, it can immediately stop your wage garnishment. When the court issues an automatic stay, it stops all collection activities, including wage garnishment. During the Chapter 7 bankruptcy process, the automatic stay will remain in effect. Of course, that can make you breathe a sigh of relief for a while. During this process, wages will no longer be garnished. To avoid wage garnishment, you can also pay off your principal debts first. Try to negotiate with your creditors. However, you should know that not all types of wage garnishment can be stopped by filing Chapter 7 bankruptcy. Some wage garnishment that cannot be stopped by filing Chapter 7 bankruptcy i.e. wage garnishment for spousal support, child support, or certain types of tax debts are not affected by the automatic stay.
Chapter 7 Bankruptcy Can Stop Foreclosure or Eviction
Filing for Chapter 7 bankruptcy can also avoid you from foreclosure or eviction. That way, you have time to catch up on your payments. However, you must know that this only applies if you have debts such as personal loan debt, credit card debt or medical debt. If you owe a mortgage or car payment, then Chapter 7 bankruptcy cannot stop an eviction or foreclosure from happening. That means, Chapter 7 bankruptcy is not the best option for those with mortgage or car payment debt.
In the case of foreclosure, an automatic stay can temporarily stop the foreclosure process. However, if you are unable to catch up on your payments or negotiate a payment plan, then the lender can file a motion to lift the stay and proceed with foreclosure. Similarly, in the case of an eviction, the automatic stay can also temporarily stop the eviction process. However, if the property owner has a good reason, such as damaging the property or endangering other tenants, then the property owner has the right to file a motion to lift the suspension and proceed with the eviction.
Conclusion
Filing for Chapter 7 bankruptcy is a great solution for those of you who are struggling with overwhelming debt. Unfortunately, filing for Chapter 7 bankruptcy can be a complicated and challenging process. Fortunately, there are ways that you can file Chapter 7 bankruptcy without money. By following the guidelines above, hopefully, it will ease your mind when you are really stressed with your debts and want to file Chapter 7 bankruptcy. Follow the steps above so that you can get a fee waiver and be able to file Chapter 7 bankruptcy successfully. Chapter 7 bankruptcy can give you renewed hope and allow you to move on with your life, rebuild your credit and reorganize your finances.
