This article is for informational purposes only. Ascend does not provide legal advice and is not an attorney. If you’d like to speak with a bankruptcy attorney that serves your city, you can speak with one in a free consultation.
Filing for Chapter 7 bankruptcy should not put another financial burden on your family when you are already struggling to make ends meet. Chapter 7 is an easy bankruptcy that is intended to give individuals and couples the fresh start they need to recover from financial hardship. However, many people do not have the money to pay a bankruptcy attorney to prepare bankruptcy forms for them.
The good news is that many people with simple Chapter 7 cases can file independently without an attorney. Here are the simple steps for how to file Chapter 7 with no money.
Before Filing Chapter 7, Ensure That Bankruptcy Is Right for You
A Chapter 7 bankruptcy is a straight bankruptcy or liquidation bankruptcy. It is for individuals and couples who do not have enough disposable income to pay their debts. They must pass a Means Test to ensure they meet the income requirements for a bankruptcy discharge in Chapter 7.
There are hundreds of variables, including changing jobs, variable income, losing income, etc. We will explain just how to calculate your income for the 6-month lookback, but to make it easier, we built a free Chapter 7 income limit bankruptcy calculator to allow you to estimate your qualifications.
The calculator uses the most recent median income figures and is updated as soon as the numbers are updated.
Are Your Debts Dischargeable?
A bankruptcy discharge eliminates the legal responsibility to pay a debt. Unsecured debts, including credit cards, medical bills, and personal loans, are dischargeable in bankruptcy. However, some debts you cannot get rid of in bankruptcy include student loans, alimony, child support, most tax debts, and judgments for DUI accidents. In some cases, you might be able to discharge student loans, but the process is complex and may require legal assistance from an attorney.
Chapter 7 does not discharge secured debts. Secured creditors have a lien on an asset to secure a debt, such as your mortgage or car loan. In Chapter 7, you can keep the property by continuing to make the loan payments. You can also get rid of the debt by surrendering the property to the creditor. If you surrender the property, the creditor cannot try to collect more money from you if the property is worth less than you owe on the loan.
Do You Have Non-Exempt Property?
A Chapter 7 trustee assigned to your case reviews your property to determine if it can be sold to pay your debts. State and federal bankruptcy exemptions protect some equity in property. However, if you have assets worth more than the exemptions, you could lose those assets in Chapter 7. Most people who file Chapter 7 with no money do not have property they could use to pay their debts, so their cases are termed no-asset Chapter 7 cases.
If Chapter 7 bankruptcy is right for you, you may want to consider filing bankruptcy “pro se,” which means filing bankruptcy without an attorney.
How to File a Pro Se Chapter 7 Bankruptcy Case
The basic steps to file a pro se Chapter 7 bankruptcy case with no money include:
Gather the Documents You Need to Prepare the Bankruptcy Forms
When you file Chapter 7 without an attorney, you are responsible for completing and filing the bankruptcy forms. You can print bankruptcy forms online through the court or access them through our software program for pro se bankruptcy filings.
Documents you need include:
- Your credit reports from all three agencies (get free copies of your credit reports here)
- Tax returns for the past two years
- Paystubs and other evidence of income for the past six months
- Copies of bills or statements for debts
- The most current statements for bank accounts, retirement accounts, and other financial accounts
- Appraisals or valuations of your real estate
- Copies of your vehicle registration
- Any other documents that relate to the money you owe, your property, or your income
It is essential to have complete documentation when completing your bankruptcy forms to ensure the information is accurate and complete.
Complete the Required Bankruptcy Credit Counseling Course
Bankruptcy law requires debts to complete a credit counseling course before filing for bankruptcy. The course can be completed online with a company approved by the U.S. Trustee Program. The course takes about an hour to two hours to complete. You must file the certificate of completion with your bankruptcy forms.
The credit counsel course costs between $10 and $50, but you might qualify to waive the fee if your household income is 150% of the federal poverty line. Check with the course provider for an application to waive the fee for the credit counseling course.
Complete the Bankruptcy Forms
The bankruptcy forms you need to File Chapter 7 bankruptcy are:
- Voluntary petition
- Statement for Social Security Number
- Summary of Schedules
- Schedules A – J
- Declaration About Schedules
- Statement of Financial Affairs
- Statement of Intent
- Chapter 7 Statement of Monthly Income (i.e., the Means Test)
- Required Notice for Individuals Filing for Bankruptcy
- Creditors Mailing Matrix
If you download the bankruptcy forms from the government website, most forms have instructions to help you complete the forms. The bankruptcy court in your state may have local bankruptcy forms that it requires, so always check with the Clerk’s Office to ensure you have the complete set of required bankruptcy forms.
TIP: My Fresh Start Finance gives you access to all required bankruptcy forms and simplifies completing the forms for one low price. You can access the system for free to see if it can help you before committing to the law payment of $99 for complete access.
Print and double-check your bankruptcy forms before signing them. You must sign the forms where indicated, swearing under oath that the information is true and correct to the best of your knowledge. Because you are filing a pro se Chapter 7, you are responsible for following the law and the rules for filing bankruptcy.
File the Chapter 7 Bankruptcy Forms and Pay the Filing Fee
Usually, the bankruptcy court nearest your home is where you file your Chapter 7 case. Look up the bankruptcy courts in your state here. You will need to take the following to the court:
- Completed and signed bankruptcy forms
- Credit counseling certificate
- Copies of six months of paystubs or other evidence of income
- A check or money order for the filing fee or application to waive filing fee
The filing fee for Chapter 7 is $338 and is due when you file your bankruptcy petition. However, if you cannot pay the filing fee, you can file an Application to waive the fee for filing Chapter 7. If you do not qualify to waive the fee, you can request to pay the fee in four installments within 120 days of filing Chapter 7.
Submit Documents to the Chapter 7 Trustee
When you file your documents with the bankruptcy court, the Clerk’s Office will provide you with your bankruptcy case number, the name and address of your bankruptcy trustee, and the information for your bankruptcy hearing (i.e., 341 First Meeting of Creditors).
Chapter 7 trustees have certain documents they request before the 341 meeting. Some trustees allow debtors to provide the documents online, or you may need to mail them or hand-deliver them to the trustee’s office. Check the Chapter 7 trustee’s website or call their office for instructions.
Complete the Financial Management Course
The second bankruptcy required for a bankruptcy discharge is the Financial Management Course. Most companies offer both courses, so check with the company you used for the credit counseling course. The course can be completed online in two hours. As with the first bankruptcy course, the fee is between $10 and $50, but you might qualify to waive the fee.
Attend Your 341 Meeting of Creditors
The meeting of creditors takes about ten minutes to complete. It may be held at the courthouse or another location. Since COVID-19, many trustees have started holding 341 meetings by video conference. Call the trustee’s office to verify the meeting location if you have questions.
The purpose of the 341 Meeting is for the trustee to verify your identity, and the information contained in your bankruptcy forms. The trustee asks the same standard questions at the beginning of each case. Therefore, arriving about 30 minutes before your scheduled hearing allows you to watch several cases to become comfortable with the process. Creditors may appear to ask questions, but creditors rarely appear at these meetings.
IMPORTANT NOTE: You must bring your current driver’s license or another government-issued picture ID to the meeting. You must also bring your government-issued Social Security card. It is also wise to bring a copy of your bankruptcy forms should you need to refer to them during the meeting.
Dealing with Secured Debts
If you intend to keep your home and vehicle, you must continue making the loan payments. If you are behind on your payments and do not work something out with the creditors, they can repossess/foreclose to seize the property.
Most car lenders require you to sign a reaffirmation agreement if you wish to keep your car. Reaffirming a car loan means that you agree to pay the car loan. If you default on the car loan, you are responsible for the entire debt. If your car is worth less than you owe to the lender, you might be able to purchase the car for its current value, but you must pay the lender in one lump sum. You must file a motion with the court to redeem the vehicle.
Filing Chapter 7 with No Money Made Easy
Filing Chapter 7 without an attorney can be overwhelming. Fresh Start Finance is a straightforward, affordable way to navigate the Chapter 7 filing process without an attorney. It is easy to begin.
Take a short questionnaire to see if our bankruptcy filing software meets your needs. The program is easy to use and works on a mobile device. After reviewing and testing the software for free consultation, a one-time payment of $99 gives you full access to bankruptcy forms, checklists, and information for filing bankruptcy with your local bankruptcy court.
To understand if Chapter 7 is right for you, consider taking the calculator below. The calculator is updated with the most recent median income figures to help you determine your qualifications.
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