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    Excellent Lawyer, friendly and on top of things and reliable and efficient. I had to go through bankruptcy twice and I trusted them every time. I had the best experience with Robert and Read More
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How to File for Chapter 7 with No Money

Chapter 7 Bankruptcy

Isn’t it ironic that someone drowning in debt must find a way to pay for the process of getting out of debt? It seems like a paradoxical situation, doesn’t it?

Chapter 7 bankruptcy, which allows you to liquidate and discharge most unsecured debts, can give you the opportunity for a fresh start. However, while promising a fresh start, this path comes with a financial burden that may pose challenges for individuals already facing difficulties. The good news is that it may be possible to file for Chapter 7 with no money down.

Stiberman Law, P.A. is a bankruptcy law firm serving the entire state of Florida that offers a free bankruptcy consultation for individuals facing debt-related matters. Robert Stiberman is a distinguished bankruptcy attorney with over 15 years of experience representing bankruptcy clients. Mr. Stiberman earned his Juris Doctorate from the University of Miami School of Law, has been a member in good standing of the Florida Bar since 1998, and is admitted to practice in the bankruptcy courts for the Southern, Middle, and Northern Districts of Florida. 

At Stiberman Law, P.A. we empathize with the stress and uncertainty often accompanying financial challenges. We aim to support and guide clients through bankruptcy with compassion and professionalism.

To help you better understand your options, our bankruptcy attorney in Florida is sharing how you can file for Chapter 7 with no money.

Steps to filing Chapter 7 for free

If someone can’t afford to hire an attorney to file for Chapter 7 bankruptcy, they may decide to handle it themselves. However, it’s crucial to know that trying to save money upfront may lead to losing more money in the long run. Here are the steps to file Chapter 7 bankruptcy without incurring any fees:

  1. Determine your eligibility to file Chapter 7. To qualify, you must pass a test. If your income is below the state median, you are eligible. If your income exceeds the median, the Bankruptcy Code mandates a “means test” to assess whether the Chapter 7 filing is presumptively abusive – see Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
  2. Complete a credit counseling course. Individuals seeking to file for bankruptcy must receive credit counseling from an approved credit counseling agency within 180 days before filing – see 11 U.S.C. §§ 109,
  3. Gather all the necessary documents before filing for bankruptcy. This process requires a lot of documentation including pay stubs, bank statements, tax returns, and credit card statements. You will need to provide a clear picture of your financial situation at the time of filing. Additionally, you will be required to provide your creditors with a summary of your financial history, transactions, and operations over certain periods of time before filing for bankruptcy.
  4. File your case and pay the Court filing fee. After finishing your credit counseling course and gathering all the necessary documents, you need to file your Bankruptcy Petition, Schedules, and forms, along with all relevant documents, to the Bankruptcy clerk in your jurisdiction (as per Fed. R. Bankr. P. 1007(b)). You can find the required forms for download on the US Courts website. There is a $338 Court filing fee which can be paid in installments. However, individuals whose household income is below 150% of the federal poverty level may be eligible for a waiver of this fee (as per 28 U.S.C. § 1930(f).
  5. Understand your state exemptions. Knowing your state exemptions helps you understand what property you can protect in bankruptcy. Since Chapter 7 involves liquidating or selling your non-exempt assets, you must become familiar with your state’s available exemptions and how to apply them before filing your case. Our guide to Understanding Florida Bankruptcy Exemptions is a free resource for your review.
  6. Know which debts can be eliminated. It is crucial to comprehend which debts can be eliminated through bankruptcy. A discharge relieves the debtor of their obligation to pay most debts and prevents creditors from taking legal action against them. However, there are some exceptions to the discharge when filing for Chapter 7. Therefore, debtors must seek advice from competent legal counsel to understand the discharge’s terms and limitations. Please refer to the article Does Declaring Bankruptcy Clear All Debts? for more information.
  7. Comply with your Trustee’s requirements. Debtors are also required to furnish the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year, as well as tax returns filed during the case (including tax returns for prior years that were not filed when the case commenced) (11 U.S.C. § 521).
  8. Attend your meeting of creditors. It is mandatory for you to attend the 341 Meeting of Creditors. This meeting is usually scheduled within 45 days of filing for bankruptcy and is conducted by the Trustee assigned to your case. Creditors may attend this meeting and ask questions regarding your bankruptcy case. Although it is rare for creditors to show up, if the meeting is delayed or disputed, it can negatively impact the outcome of your Chapter 7 bankruptcy.
  9. Complete your financial management course. To be eligible for a bankruptcy discharge, you must complete an approved financial management course. You will need your bankruptcy case number to complete the course, and you must file evidence of completion before your case closes.

If you don’t have an attorney representing you, you may face complex legal issues that can cause you to take time off from work and your family. This can also result in the loss of your property. So, seeking legal advice and representation is essential to help guide you through the process.

As we said above, legally, you can file for bankruptcy without legal representation. Still, you are more likely to lose property or have your case dismissed, or the process can take significantly longer and cause more stress than necessary. Having an attorney on your side to ensure you keep your property when possible, have your paperwork in order, and push back against creditors can help you achieve a more favorable outcome.

Key Exemptions in Chapter 7 Bankruptcy

Not all assets are vulnerable to liquidation in Chapter 7 bankruptcy. Specific exemptions allow debtors to retain essential assets for a fresh start. Commonly protected items include a primary residence, up to a certain equity limit, essential household goods, clothing, and tools necessary for the debtor’s profession.

Although you can file for bankruptcy in Florida after living there for over the greater portion of 180 days before filing, you have to be a Florida resident for much longer to be able to use Florida’s bankruptcy exemptions. Specifically, you must live in Florida for 730 days before filing the bankruptcy petition. If that is not the case, you will have to use the previous state’s exemptions.

Florida’s Chapter 7 bankruptcy provides specific exemptions to help debtors retain essential assets, including the following:

  1. Homestead exemption: The homestead exemption stands out, allowing unlimited equity protection in the primary residence, subject to acreage limits.  
  2. Personal property: Personal property up to $1,000, including furniture, art, and electronics, can be exempted, and this amount doubles for married couples.  
  3. Wages: The head of the household’s wages are exempt up to $750 per week. Other family members can protect their wages up to 75% or 30 times the federal minimum wage, whichever is greater.
  4. Vehicle: Florida permits a $1,000 vehicle exemption, which is crucial for commuting purposes.  
  5. Pensions: Retirement benefits, including 401(k)s and IRAs, are fully protected, ensuring long-term security remains intact for filers.
  6. Wildcard exemption: The debtor can claim up to $4,000 in wildcard exemption if they don’t use the homestead exemption. It can be used for personal property, including art or jewelry. 

Chapter 7 Filing Fees and Costs

Below is a breakdown of costs, some of which may be waived, for filing Chapter 7 without an attorney:

  1. $338 in court fees – The fee is the sum of a $245 filing fee, a $78 administrative fee, and a $15 trustee surcharge.
  • The court filing fees can be paid in installments. The fee may also be waived for individuals whose household income is below 150% of the federal poverty level – see 28 U.S.C. § 1930(f). To qualify for the fee waiver, you must submit Form 103B – Application to Have the Chapter 7 Filing Fee Waived – along with your bankruptcy filing. This form requires you to certify your income and attest that you cannot afford to make installment payments.
  1. About $50 total in court required courses – individuals seeking to file for bankruptcy must receive credit counseling from an approved credit counseling agency within 180 days before filing – see 11 U.S.C. §§ 109, and an approved financial management course after filing to be eligible for a bankruptcy discharge – see 11 U.S.C. § 727. If you cannot afford these fees, you can request a waiver from the agency or organization handling your case.

In summary, filing for Chapter 7 will cost $388.00, which includes $338 in court fees and $50 in court-required courses. However, you may be eligible to waive these fees and file Chapter 7 with no money down.

When filing for bankruptcy, your attorney’s fees are usually your most significant expense. Typical fees can range depending on the complexity of the case and the chosen attorney’s experience. Filing for Chapter 7 bankruptcy can have profound legal implications and may result in the loss of improperly unexempted assets. While it’s possible to file without an attorney (pro se), it’s highly recommended that you have an attorney represent you.

It’s good to know that many bankruptcy attorneys offer a free initial consultation. This consultation will help you make an informed decision about whether bankruptcy is the right option for you. During the consultation, you can also find out if you’re eligible to file, learn about the possible implications of filing for bankruptcy, and explore alternative options.

Reasons People choose to file Chapter 7 Bankruptcy

  1. Elimination of Most Unsecured Debt: Chapter 7 bankruptcy can wipe out unsecured debts like credit card balances, medical bills, and personal loans. This relief mainly benefits individuals struggling to manage their finances, offering a chance to regain control and rebuild credit.
  2. Stopping Wage Garnishments: Filing for Chapter 7 can halt wage garnishments immediately through an automatic stay, which prevents creditors from continuing collection actions. This stay remains in effect during the bankruptcy process, potentially allowing for the discharge of the underlying debt, causing the garnishment.
  3. Halting Evictions and Foreclosures: If facing eviction or foreclosure, Chapter 7 can temporarily stop these actions, providing time to catch up on payments. However, it may not offer a long-term solution, and landlords or lenders can seek to lift the stay under certain circumstances. Consider Chapter 13 for cases concerning secured loans such as Mortgages.
  4. A Fresh Financial Start: Chapter 7 can provide a clean slate by eliminating debt and allowing individuals to retain exempt property. This fresh start, coupled with sound financial planning and guidance from a bankruptcy attorney, can help rebuild credit and restore economic stability.

Alternatives to Filing Chapter 7

It’s essential for people who owe money to know that other options are available besides Chapter 7 bankruptcy. If you own a business, like a corporation, partnership, or sole proprietorship, you may want to keep operating and avoid selling everything to pay off your debt. 

In this case, filing for Chapter 11 bankruptcy might be a better option. Chapter 11 allows you to try to work out a plan to pay off your debt, which could include things like reducing the amount you owe, getting more time to pay, or even completely changing how your business operates. If you’re a sole proprietor, you may get debt relief through Chapter 13 bankruptcy.

Individual debtors with regular income can opt for debt adjustment under Chapter 13, which offers the advantage of potentially saving their homes from foreclosure. This lets them catch up on past-due payments through a structured payment plan.

It’s important for debtors to understand that negotiating with creditors or seeking help from debt counseling services may offer alternatives to bankruptcy.

Schedule a Free Consultation with a Florida Bankruptcy Attorney Today

Filing for bankruptcy can be daunting, especially if you don’t have money to spare. However, filing for Chapter 7 bankruptcy with no upfront costs is possible. At Stiberman Law, P.A. we understand this can be overwhelming, but we offer affordable payment plans to ensure you receive the necessary representation, advocacy, and guidance for a better financial future. For a free consultation, please call us at (954) 218-5056 or fill out the form below to get started.

Resources:

  1. You can see documents needed to file chapter here: https://stibermanlaw.com/documents-needed-to-file-chapter-7/
  2. You can obtain a free copy of your credit report by visiting https://www.annualcreditreport.com/index.action
  3. Bankruptcy forms are also available for download via the US Courts website. More resources are available in our post where attorney Stiberman discusses Chapter 7 Bankruptcy Forms Florida.

Sources:

  1. What Is Chapter 7 Bankruptcy? Qualifications And How To File Retrieved from https://stibermanlaw.com/bankruptcy/chapter-7-attorney/
  2. US Courts- Poverty Guidelines. Retrieved from https://www.uscourts.gov/sites/default/files/poverty-guidelines.pdf
  3. 28 U.S. Code § 1930 – Bankruptcy fees. Retrieved from https://www.govinfo.gov/content/pkg/USCODE-2015-title28/html/USCODE-2015-title28-partV-chap123-sec1930.htm
  4. US Trustee Program – List of Credit Counseling Agencies Approved Pursuant to 11 U.S.C. § 111. Retrieved from https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111
  5. 11 U.S. Code § 109 – Who may be a debtor. Retrieved from https://www.law.cornell.edu/uscode/text/11/109
  6. 11 U.S. Code § 727 – Discharge. Retrieved from https://www.law.cornell.edu/uscode/text/11/727
  7. US Trustee Program – Census Bureau Median Family Income By Family Size (Cases Filed On or After November 1, 2023). Retrieved from https://www.justice.gov/ust/eo/bapcpa/20231101/bci_data/median_income_table.htm
  8. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Retrieved from https://www.congress.gov/bill/109th-congress/senate-bill/256
  9. Federal Rules of Bankruptcy Procedure – Rule 1007. Lists, Schedules, Statements, and Other Documents; Time Limits. Retrieved from https://www.law.cornell.edu/rules/frbp/rule_1007
  10. US Courts – Bankruptcy Forms. Retrieved from https://www.uscourts.gov/forms/bankruptcy-forms
  11. 11 U.S. Code § 521 – Debtor’s duties. Retrieved from https://www.law.cornell.edu/uscode/text/11/521

Written By:

Attorney Robert Stiberman

Robert is an experienced bankruptcy attorney adept at handling Chapter 7, 13, and 11 filings, with more than 15 years of experience in bankruptcy cases. Robert represents clients in both consumer and business bankruptcy ... Read More

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