How Can I File a Fast, Low-Cost Bankruptcy?

The fastest, cheapest way to file bankruptcy is to file an emergency petition with a simple three-page document. The form can be filled out in about 15 minutes without the help of a lawyer, and it is not necessary to pay the standard bankruptcy fee when you deliver the abbreviated application to the federal bankruptcy court. The paperwork is available from a court clerk.

The federal bankruptcy courts allow what they regard as emergency or skeletal (bare bones) bankruptcy petitions. This process is used mostly by people who must file bankruptcy immediately because of wage garnishment, apartment eviction, foreclosure or some other pressing situation. However, the process can be used by anyone wanting to file quickly.

The initial three-page petition asks only general questions about your income and debts. You are allowed to estimate the number of creditors you owe and your overall debt. The form is so simple that it can be filled out without taking the time to dig through tax records, credit card statements and other detailed financial information.

Once the three-page document is filed you immediately gain protection from the federal bankruptcy courts, including a powerful legal provision called "the automatic stay." The automatic stay is a major reason many people wish to file for bankruptcy quickly. The stay stops wage garnishment, stalls foreclosure and prevents evictions. It also stops all other debt collection efforts, including lawsuits and the enforcement of judgments.

After filing the emergency petition the debtor must follow up by providing much more detailed financial information. The debtor is given two deadlines for completing the standard bankruptcy application, with some of the material due in seven days and the rest in 14. If the information is not submitted before the deadlines, the emergency filing will be canceled, or dismissed, and the automatic stay will be lifted. The filing fee of $299 for Chapter 7 or $274 for Chapter 13 must also be paid within the 14 days. People who cannot afford the fee can request a financial hardship waiver or can request an installment plan.

Debtors are allowed to complete the formal bankruptcy filing on their own which technically eliminates the need for a lawyer and saves considerable money. Bankruptcy attorneys charge from several hundred to a few thousand dollars for a bankruptcy filing, depending on the complexity of the case. Although self-filing is possible, the U.S. Bankruptcy Courts strongly advise hiring an attorney to handle the extreme complexity of the process.