An easy way to file bankruptcy without an attorney
Filing bankruptcy can take six months and cost thousands of dollars. If you’re filing Chapter 7, it’s a good bet you don’t have that kind of time or money. You need to get free from your debts NOW!
In this video, I’ll show you the process for filing then reveal how to file bankruptcy online and without a lawyer to save time and money.
The 2020 Bankruptcy Boom
Nation, bankruptcies in the United States surged to over 1.5 million after the last recession in 2010 and everything is pointing to another jump in filings this year. That means an overwhelmed system, higher attorney fees and a longer process to get you the fresh start you need.
Now we’ve already seen in our last video how bankruptcy costs can go as high as $4,000 and even a simple Chapter 7 bankruptcy costs $1,500 on average. In normal times, it can take between four to six months to get through the process and much longer if we see a surge in filings.
So I partnered with Upsolve, America’s largest bankruptcy non-profit, to put this series together. We’ve covered the situations when filing bankruptcy is your best option and how to decide. We looked at the costs in our last video. Now today I want to show you how to file bankruptcy online without a lawyer so you can do it at your pace and save thousands of dollars.
See if you qualify to file bankruptcy on Upsolve and save thousands off attorney fees
We’ll start with the basic process; the forms, filing and means test to decide what type of bankruptcy you should file. Then I’ll show you how to use the Upsolve app to file bankruptcy and how easy it can be to get free of your debts.
Upsolve has helped families clear more than $207 million in debt through Chapter 7 and it’s 80% funded through government grants and philanthropic charities. That means it’s not out to make money on your bankruptcy.
In fact, you won’t pay Upsolve a dime to use the app. The only other fees the company collects are from lawyers who provide free evaluations for individuals that want the attorney approach rather than through the free app, or that just want to talk to someone to get individualized legal advice.
Bankruptcy Process Explained
You start the bankruptcy process by analyzing your situation and options. We did this in the first video, looking at when is bankruptcy the right choice and alternatives like debt settlement and consolidation. Generally if you’re unable to pay your debts or if paying them is going to mean living in poverty for the next three- to five-years, you might consider bankruptcy as a way to get free of your debt.
Next, if you’re working with a bankruptcy lawyer, you’d take a means test to see if you qualify for Chapter 7 or still need to pay your debts under a Chapter 13. This involves filling out a form, kind of like doing your taxes, about all your assets and income. Basically it’s deciding whether you make too much money and have too many assets to wipe your debts clear in Chapter 7.
And this is probably one of the biggest differences between working with a bankruptcy lawyer and Upsolve. The Upsolve app is going to ask you some of these questions while you’re using the app and is only available to those with income low enough that you don’t need to take the means test. Upsolve is focused on the people that need it most, those filing Chapter 7 with fewer assets and income.
Bankruptcy Forms for Filing
Next in the process come the forms…lots of forms. This can be two or three sessions with a lawyer because it includes paystubs for the last 60 days, tax returns for the last two years, and about two hours of listing out all your debts and finances.
Total it’s more than 60 pages which is why bankruptcy lawyers charge $1,500 and more for the process. It’s also part of the reason why the Upsolve app was created, to make it easy for regular people to be able to file when they can’t afford a lawyer.
Everyone filing bankruptcy has to take two online courses, a credit counseling course you take before filing and then a debtor’s education course afterwards. The credit counseling course costs between $15 to $25 and takes about an hour online.
Bankruptcy 341 Meeting Explained
Next you’ll file all the paperwork with the nearest bankruptcy court. There are 94 of these throughout the U.S., usually in the capital city and larger towns. This is also where you’ll pay the $335 filing fee or at least the first installment. Between three to five weeks after filing, you’ll go to what’s called a 341 meeting of creditors. This is where the trustee, the official court person assigned to review your documents, will ask you some basic questions about your debts. Everyone you list as owing money to will be notified and allowed to ask questions here as well but it rarely happens. It’s usually you and several other people filing bankruptcy and then all the creditors that showed up so the trustee wants to move things along. Most of these take about 10 or 15 minutes max for each person filing.
After your meeting, you can take the debtor’s education course, it’s your last online course and a lot like the credit counseling course. This one is between $10 to $50 and you’ll file the certificate of completion with the court after you’re done.
If the trustee doesn’t need any extra information, you’ll get notice about two months after your 341 meeting that your case is closed and your debts discharged. It is a lot of work and the courts don’t make it any easier.
How to File Bankruptcy without a Lawyer
Upsolve was created to help people who can’t afford a lawyer. Since 2016, it’s helped relieve over $207 million in debt. The app was spun out of a group from Harvard Law after seeing how the high cost of filing bankruptcy locks those that most need it out of the process. It’s almost entirely funded by government grants and charities and doesn’t collect a dime from people using the app.
Best of all though, you can use it at your pace. It takes about two hours to answer all the questions and the app fills out the forms for you. You upload your paystubs and taxes and you’re ready to go.
You don’t take the means test with Upsolve because only those with low enough income will qualify on the app. The app gives you a link to take both the credit counseling courses. It’ll even show you how to get a fee waiver on the courses if your income is low enough.
Upsolve will review your forms before you file for completeness and consistency. You’ll be able to print out all the forms the app will show you the nearest bankruptcy court for filing. The forms you download from Upsolve will also include a waiver for the $335 court filing fee.
As a bonus, Upsolve has made a five-minute video to prepare you for your 341 trustee meeting. Before your meeting, you can click through and you’ll see everything you need to take as well as an example of the questions you’ll be asked. It’s a huge stress reliever just to know what to expect at this thing.
If you’re considering filing bankruptcy or just don’t know if you can keep up with your debts, check out Upsolve. If you qualify to use the app it could save you thousands in lawyer fees and make filing easier than you might imagine.
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.