How to afford a bankruptcy lawyer when you’re already broke…

One of the questions I am most often asked by clients is “how am I supposed to get enough money to pay for this bankruptcy?”.  After all, you come to me because you don’t have enough money to pay your bills.  So how are you supposed to be able to just magically come up with the money to file? It’s a real dilemma.

If your finances are in shambles, then you absolutely NEED to file bankruptcy. Below are some suggestions that have helped my clients afford the cost of their Dallas bankruptcy.  There may be other ways to pay for your bankruptcy, but these are the most common.

Ways To Come Up With The Money To File Your Bankruptcy Case.

1. Stop paying your credit cards and any other bills that will go away in the bankruptcy case. This is the most obvious answer. Stop paying those bills entirely and you can use the money you save to apply to the bankruptcy fees. If it’s unsecured debt (credit cards, medical bills, payday loans, etc.), I will be making it go away in the bankruptcy case anyway and stop paying on it now will not harm your Dallas bankruptcy case. Of course, you need to keep paying your rent and utility bills.
2. Use your tax refund. Most people get a refund after they file their taxes. Lately, we’ve all received a few stimulus checks too. If you use this money to pay off your bankruptcy attorney fees, you get all of your other debts wiped out more quickly. Win-win. There are times that you could lose your tax refund when you file bankruptcy. This does not happen very often but when the exact facts exist to make it a possibility, you may as well spend it on your bankruptcy ahead of time.
3. Friends and family. Many people are able to depend on help from others they are close to if it’s for a really good cause. I often have clients who got the money for their bankruptcy fees from one of their parents. Sometimes it is an outright “gift” by the other supportive person, and sometimes it is just a temporary “loan” to my client. Sometimes, the other supportive person has even put the “gift” or “loan” on one of their credit cards when they did not have the cash laying around to give away. I can take that credit card payment online, and you’ll get your case filed a lot more quickly.
4. 401k, IRA and retirement accounts. If you take a little bit out of your 401k to pay off your bankruptcy, you’ll eliminate all your other debt. So– it can actually be a great investment, especially where the bankruptcy filing is to save a house. I NEVER advise taking money from retirement accounts to pay the actual bills we will be getting rid of though, and this includes catching up the mortgage. Pay for the bankruptcy, then let your bankruptcy solve the money problems.
5. Increase your income. I know it’s easy for me to say and hard for you to do, but it CAN be done. You could get more hours at work or temporarily get a second job. Your spouse could get a temporary job. If you have working-age kids, even they can get a temporary job.
6. Decrease your costs. Cut down on unnecessary monthly expenses. You might be able to skip a couple months of tanning and stop going to the dry cleaners for example. Of course, I don’t know what expenses you personally can go without but I do know that each of us (myself included) spend small amounts on things we could go without and that those small amounts add up to a lot of money at the end of the month. If you want to give up your house as part of the bankruptcy, you could even stop paying the mortgage and use that money to pay for the bankruptcy case.
7. Sell something. I’ve even had clients who paid for their case by having a huge garage sale. It was all stuff they didn’t need around the house and needed to get rid of anyway, so why not use the process of getting rid of the junk to get rid of all their debts at the same time?

No matter how you scrounge up the money to pay your bankruptcy lawyer, stay focused on the big picture– the amount you are paying is tiny compared to the relief you are getting!