Filing bankruptcy when you feel too broke to file is more common than you think. Most people start with a small payment, set up a plan with a lawyer, stop paying unsecured debts, and use that freed-up cash to get the case filed. In this week’s podcast, Florida attorney Shawn Devries breaks down exactly how people with little to no money can still get the fresh start they need.
Frequently Asked Questions
- I’m broke. How can I afford to file?
- What is a bifurcated fee agreement in plain English?
- What’s the smallest amount that gets me started and stops the calls?
- Do collection calls really stop after I hire a lawyer?
- Which bills do I keep paying and which can I pause?
- My checking and credit card are at the same bank. Can they grab my money?
- How long does a basic Chapter 7 take?
- What if a collector sues me before I file?
- Will I lose my car or household items?
- How will bankruptcy affect my credit and future purchases?
- I have no income. Can I still file?
- What exactly should I say when collectors call before I file?
FAQ: I’m broke. How can I afford to file?
You don’t need thousands of dollars upfront to file bankruptcy. Many firms offer payment plans. Some use a bifurcated setup where you pay the court filing fee and credit report first, then make attorney-fee payments after filing. If bifurcated isn’t offered in your area, most firms still let you pay in small installments until you’re ready to file.
FAQ: What is a bifurcated fee agreement in plain English?
Under a bifurcated fee agreement, the first payment covers the bare minimum to get filed, like the court’s filing fee and your credit report. The second payment covers the attorney fee, which you pay over time after the case is filed. It lets you start with a small amount and get protection sooner.
FAQ: What’s the smallest amount that gets me started and stops the calls?
Firms vary, but many will start you with something like $50 to $200 and set a weekly or monthly plan. Once you retain the lawyer, you can tell collectors to call your attorney instead of you.
Speak with someone who can connect you with a bankruptcy attorney in your state (for free).
FAQ: Do collection calls really stop after I hire a lawyer?
You can answer and say, “I’ve hired a bankruptcy attorney. Please contact my attorney at [name, phone].” Most collectors stop calling. The automatic stay makes it official once your case is filed, so keep moving toward filing.
FAQ: Which bills do I keep paying and which can I pause?
Your attorney will likely tell you to keep paying rent or mortgage, utilities, car insurance, and transportation. Pause unsecured debts like credit cards, personal loans, and most medical bills after you and your attorney decide to file. Use that freed-up money to fund your case.
FAQ: My checking and credit card are at the same bank. Can they grab my money?
They might try to collect the money. Consider moving your direct deposit to a new bank or credit union before you file and stop any auto-pays to that card. Ask your attorney for timing advice.
FAQ: How long does a basic Chapter 7 take?
Plan a few weeks of prep, a brief trustee meeting about a month after filing, and discharge about 90 days after the first meeting date if you finish the required courses and your paperwork is clean.
FAQ: What if a collector sues me before I file?
Tell your attorney right away and share the papers. Filing usually stops the lawsuit. The key is not to wait.
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FAQ: Will I lose my car or household items?
Most Chapter 7 cases are no-asset cases, so people keep everything the law protects. Your attorney will review your state exemptions and plan around any items that might be at risk.
FAQ: How will bankruptcy affect my credit and future purchases?
Your score may dip, then recover as you build new positive history. Many clients finance reliable cars soon after discharge if the budget supports it. Certain home loan programs may be available within a couple of years if you meet income and credit guidelines.
FAQ: I have no income. Can I still file?
Talk to a local attorney. Some clients can pay the court fee in installments or request a waiver, and firms may still offer very small plans. Community resources may help with fees in some cases.
FAQ: What exactly should I say when collectors call before I file?
Stay calm and keep it short. Say, “I’m reviewing my options with an attorney. Please put any communication in writing,” and end the call. If you already hired a lawyer, say, “I’m represented. Please contact my attorney at [name, phone].” Do not agree to payments on the spot.
