How Does $0 Money Down Bankruptcy Work? (If you Qualify)

A “$0 money down Chapter 13 bankruptcy” is a payment arrangement some bankruptcy attorneys and firms offer to make filing more accessible for people who can’t afford to pay upfront fees. Normally, bankruptcy involves both court filing fees and attorney’s fees before your case can be filed. In a “zero down” setup, the attorney allows you to file immediately without paying anything upfront, and their fees (along with the filing fee) are rolled into your Chapter 13 repayment plan. That means you can get full bankruptcy protection right away including the automatic stay that stops wage garnishments, repossessions, and creditor calls while paying the costs over time through your plan.

Here’s how it generally works: when you file a Chapter 13 case, you propose a repayment plan lasting three to five years based on your income and debts. The attorney agrees to be paid from those plan payments instead of requiring cash upfront. The bankruptcy trustee (the court-appointed official who manages your case) then distributes part of your monthly plan payments to your attorney until their fee is paid in full. The rest goes to your creditors according to the plan. Because this setup is court-approved and transparent, the attorney’s compensation is typically capped or pre-approved by the bankruptcy court to ensure fairness.

It’s important to note that “$0 down” doesn’t mean the bankruptcy is free, you’re still paying for legal services and court costs, just on a deferred basis. Also, not every person or attorney qualifies for this type of arrangement. You usually need to have a steady income, since the success of a Chapter 13 case depends on making regular plan payments. Still, for many people facing urgent financial crises like an impending foreclosure, car repossession, or wage garnishment a $0 down Chapter 13 can provide immediate relief and a structured path to get back on track without needing cash upfront.