FAQ: Why do you need your fees up front?

Many people ask me why I need my fees paid up front as part of a chapter 7 bankruptcy filing.  The answer is simple: if you owe me money when we file, I'm a creditor and the debt is discharged as part of the bankruptcy.  I cannot legally or ethically attempt to collect a debt in violation of the automatic stay or discharge imposed by the bankruptcy court.

So how do you come up with a lump sum to file a chapter 7?  I understand it is a difficult proposition in nearly every case.  There are a number of possibilities:

• Setup a payment plan with me to pay over a few weeks prior to filing while you gather the documentation and complete the credit counseling;
• Stop paying creditors on property you don't intend to keep and put it towards a bankruptcy;
• Sell personal property you don't need (just be sure to document everything sold and how much you received);
• Family and friends will often assist; I've even been paid by an ex-spouse;
  
  
• In limited circumstances, a chapter 13 filing might be possible.  In a chapter 13, my fee can be partially paid after the filing.
  
  
• Borrowing from a retirement account or insurance policy, although a last resort, is another possibility.

This is another way being proactive about bankruptcy helps.  If you take action early before your wages and savings are garnished, the bankruptcy fees can be one less hurrdle in the way of getting a fresh start.