Many people delay filing for bankruptcy or decide not to hire a bankruptcy attorney solely because they believe they can't afford it. If you're considering filing for bankruptcy, money is obviously tight. You may be thinking that it doesn't make sense to try to solve debt problems by spending more money. However, if you are in serious financial trouble and have no way of getting out, a bankruptcy may very well be a necessity. And if you need to file for bankruptcy, you definitely need a competent bankruptcy attorney who understands the new law and how to best provide for your fresh start.
Delaying a bankruptcy when it is the best solution is a bad financial move, and so is trying to file without a lawyer. Not only will you likely run into trouble if you attempt to file by yourself, you may make a fatal mistake in your case, such as failing to recognize a non-exempt asset. Such a serious error can put you in a far worse position than if you had simply hired an experienced bankruptcy attorney.
Still, if you are ready for a fresh start with your financial troubles, it is natural that you are leery of incurring further expenses. Funding the bankruptcy responsibly and avoiding unnecessary costs are plans worth pursuing.
First, you should keep in mind that a bankruptcy attorney understands your situation and will work with you to figure out how you can structure your bankruptcy so that you'll be able to pay for legal fees. If you file for Chapter 13 bankruptcy, your attorney can advise you on including the costs of bankruptcy in your Chapter 13 plan payments.
You should definitely look for a bankruptcy attorney who will offer you a free or very low cost initial consultation. At the consultation, the attorney will be able to assess your situation and offer suggestions about managing the costs of filing for bankruptcy protection. However, don't expect that he'll be able to quote a total fee at the consultation: every bankruptcy is different, and they have only become more complicated since Congress reformed bankruptcy law in 2005.
One potential source to fund your bankruptcy costs is your tax return. If you get a big return, the money will be much better spent on resolving your debt problems permanently, rather than trying to catch up to creditors when the race is futile. Don't mull it over, either -- even before you get your return you should consult a lawyer and start making plans to file. That money will be gone in no time!
You might also consider asking your family or friends to help you fund the bankruptcy by gift or loan. If considering this option, remember to be up front with your plans so as to avoid any strained relationships.
If Chapter 13 is your best option, but you are unable to afford your plan payment on top of your monthly living expenses, consider taking on a part time job or seeking additional forms of monthly income. You might also consider taking in a roommate or cutting back on cable, telephone or other unnecessary expenses. Other options for funding the bankruptcy are selling non-essential property (always for fair market value), or asking working-age children to take on an extra job.
Finally, keep in mind that once you have made the decision to file, it is unnecessary to continue throwing money away to your unsecured creditors. Think of all the money you'd be saving if you weren't struggling to pay all of those monthly minimums. For many people, that savings alone is more than enough to fund the entire cost of the bankruptcy.
Don't think of bankruptcy costs as just another expense--this one is an investment in your future.