Are you too Broke to File Bankruptcy?

Jan 22, 2018 | Bankruptcy

Do you feel like you do not make enough money to file Bankruptcy in New Jersey?NJ BAnkruptcy attorney takes payment plans

It may sound counter-intuitive, but some people do not have enough money to file for bankruptcy.  According to CNN hundreds of thousands of Americas are too poor to be able to file for bankruptcy. At the Law Offices of Patel, Soltis, and Cardenas we are doing everything possible to allow people to file for bankruptcy even when they feel they do not have enough money to file for bankruptcy.  Where many attorneys want their fee up front and all of the fees associated with filing given to them prior to filing, we work with people to make bankruptcy affordable and then give our clients a free credit repair course on us.

We partnered with to work with our clients to improve their credit scores after bankruptcy in New Jersey and New York. Instead of having our clients pay $1000 for the course, we arrange for our bankruptcy clients to be able to take the course to repair their credit for free.

You have serval things to consider before filing either a chapter 7 bankruptcy or a chapter 13 bankruptcy when you do not have the cash flow to afford to file.

  1. Are you at or 150% below the Federal Poverty Level?
  2. If you own a home, do you have equity?
  3. Are you judgment proof?
  4. Can you afford a payment plan?

If you are you at 150% below the Federal Poverty Level, you are eligible not to pay court fees.

If you are below or at only making 150% of the Federal poverty level, you qualify to file an application to have the chapter 7 filing fee waived.

If you are a single family household and make less than $18,210 a year you can file to have your court fee waived which would save you $335 for filing a chapter 7 bankruptcy.

POVERTY GUIDELINE 150% to the Poverty Guidelines
For families/households with more than 8 persons, add $4,320 for each additional person for the Poverty Guideline and $6,480 for 150% to the Poverty Guidelines.
1 $12,760 $19,140
2 $17,240 $25,860
3 $21,720 $32,580
4 $26,200 $39,300
5 $30,680 $46,020
6 $35,160 $52,740
7 $39,640 $59,460
8 $44,120 $66,180

If you own a home, you need to check your equity before filing a Chapter 7 Bankruptcy.

If you have too much equity in your home, and you file for a chapter 7 bankruptcy, the Chapter 7 Trustee can sell your home to pay your creditors.  If you are underwater on your mortgage or your equity can be exempted, you can file a chapter 7 without worry of your home being sold.  You should consult a bankruptcy attorney who understands when filing either a chapter 7 or chapter 13 bankruptcy is appropriate.

Are you judgment proof?

Who is judgment proof you may wonder? Normally, a creditor can garnish your wages, or place a levy on your bank account, and even place a lien against any property that you own. However, if you don’t have any income or property that the creditor can legally go after, then you are what is referred to as judgment proof. Even if you lose in court, there is no money for the creditor or winner of the lawsuit to go after.  Judgments in New Jersey are good for 20 years, so even if you are judgment proof today, you may not be judgment proof in 10 years.  Even after the 20 years, the creditor can renew the judgment.  So, if you see yourself eventually not being judgment proof it may be a good time to file.  Eventually, you may be making too much money to file a chapter 7 bankruptcy.  This is where the chapter 7 means test can be applied to see if you would have to file a chapter 13 bankruptcy instead of a chapter 7 bankruptcy.

Can you afford a payment plan after you filed a chapter 7 bankruptcy petition? ($125 or $200 a month?)

Normally, bankruptcy attorneys want all of their money up front because if you sign a contract with them, the contract is now included in your bankruptcy filing and you are not legally obliged to pay.  Many people can barely come up with the $335 filing fee let alone the cost of paying an attorney.  Sometimes it is a Catch 22 situation.  A person has a garnishment so they do not have the funds to file a bankruptcy, but if they filed for bankruptcy the garnishment would stop and they would then have the money to file for the bankruptcy.  We eliminated these situations

We allow bankruptcy filers to sign 2 contracts with us.  One for pre-filing services, and one for post-filing services.  Instead of coming up with over $1500 to file a chapter 7 bankruptcy, we let people pay us over time.  If you make more than $1000 month in gross income, we will get a payment plan together for you.  Or, if you do not make this amount of money, we will let a guarantor sign for you if they meet the income requirements.

If you additional questions about filing a Chapter 7 Bankruptcy or if you qualify.  Contact us at (844) 5 – DEFENSE – (973) 200-1111 or email us at

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