Understanding bankruptcy and finding help filing bankruptcy.
Bankruptcy remains a last-resort option for people facing overwhelming debt, but it continues to be used by hundreds of thousands of Americans each year. Most filers are working individuals or families who experienced events that pushed them beyond their ability to keep up, such as a serious illness, job loss, divorce, disability, or the sudden loss of a primary wage earner. Bankruptcy can be one of the few remaining tools to stabilize a household when all other options have failed and learn more about the process and how to get help as well.
Find details below on how to access legal aid, use non-profit technology, and navigate the court and financial system if you have limited funds. Unfortunately, these types of financial shocks are too common among readers who visit needhelppayingbills.com. While there are process and cons to it, in general the process is meant to give people a second chance and reduce the pressure from debt collectors, unpaid bills, and lawsuits, though it must be approached carefully.
What is bankruptcy?
Bankruptcy is a legal action overseen by federal courts. Its purpose is to provide a fresh financial start, either by discharging some unsecured debt or by creating an affordable repayment plan. The two forms most people use are Chapter 7 and Chapter 13, each with different income rules and outcomes.
Generally, filing for bankruptcy should be your last resort for help. While it should never be entered into lightly, it may prove itself to help and be a positive solution for your situation. Before filing, you should take many steps. You should try to improve and repair your credit through debt consolidation, which may help you get out of debt without the repercussions of a bankruptcy
Many people learn during the planning stage that not all debts can be eliminated. Child support, alimony, recent tax debts, and most federally backed student loans are not discharged. The court reviews income, assets, and debts to determine what is forgiven and what must be repaid. More details on the basics of filing are available at https://www.uscourts.gov/services-forms/bankruptcy with information on Chapter 7 vs 13 as well. We also have more details listing many of the top reasons when to file bankruptcy.
How to get help with filing personal bankruptcy
Filing for bankruptcy is a major legal (as well as financial step) that is designed to provide a "fresh start" for honest debtors. However, the process is time intensive, paper-intensive, complicated and governed by strict federal rules. While hiring a private attorney at an often steep cost is often the standard recommendation, it is not the only path and many people can't afford to do that.
Free and low-cost legal advice remains important because the process is difficult to understand without guidance. Legal aid organizations funded by the Legal Services Corporation offer free consultations and other help to low-income families, including bankruptcy consultations, application assistance, and representation. A statelist / directory is available at legal aid attorneys by state. Bankruptcy law is complex, and having a pro-bono lawyer significantly increases the likelihood of your debts being successfully discharged
Many states also fund civil legal services that include bankruptcy counseling. Local bar associations hold free bankruptcy clinics, and many private attorneys offer a free initial consultation. These resources allow people to review alternatives such as debt settlement, hardship programs from lenders, or structured repayment plans before deciding whether bankruptcy is appropriate. Additional information on can be found at our page of free bankruptcy consultation services.
State Bar Associations are another legal option. Almost every state bar association has a "referral service. which will help people find help with any civil needs, including a personal bankruptcy filing. Contact your state bar (website here https://www.americanbar.org/groups/legal_services/flh-home/ ) and ask for "pro bono" or panels for lower income households. These are lists of lawyers willing to take cases for reduced fees or for free based on hardship.
There are also free tech solutions, including Upsolve (website https://upsolve.org/), for filing Chapter 7 bankruptcy. If you do not qualify for a free lawyer from legal-aid but cannot afford a private one, technology can help. Upsolve is a reputable national non-profit that offers a free online tool to help users file Chapter 7 bankruptcy in all states. It acts like "TurboTax" for bankruptcy forms.
Credit counseling is also required before filing bankruptcy and non-profits can help consumers understand the process too. Approved agencies review income, expenses, and debt and provide a certificate needed for the court. These agencies can also help families build a budget or determine whether consolidation or settlement can work. We at NHPB have a list of non-profit counseling agencies by state.
For people who qualify, bankruptcy offers some immediate protection. Once a case is filed, collection activity stops through what is known as the automatic stay. Lawsuits, wage garnishments, repossessions, and creditor calls pause unless the court permits them to continue. This protection gives families breathing room to organize finances and prevents sudden loss of income during a crisis.
Filers may keep certain assets, depending on their state’s exemption laws, and many households use bankruptcy to prevent or delay foreclosure while they arrange a longer-term plan with their mortgage lender. A bankruptcy filing may also help you save your home and prevent or delay a home foreclosure. While it should be considered an option of last resort, you can select this bankruptcy option to save your house.
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