Can Someone Else Pay for My Bankruptcy?

February 22, 2023

Can A Friend or Relative Pay for My Bankruptcy?

Filing for bankruptcy can be difficult, and the financial implications of filing can be daunting. If you are considering bankruptcy, you may wonder if someone else can pay for it.  Money is usually tight in bankruptcy situations.  Also, speed can be very important in stopping foreclosure and garnishments. Can someone else pay for you to file for bankruptcy?  It depends on the type of bankruptcy you are filing.   Let’s take a look at whether or not someone else can pay for your bankruptcy.

Chapter 7 Bankruptcy

Someone Else Paying for Chapter 7 BankruptcyIf you are filing for Chapter 7 bankruptcy in Indiana, you must pay the court costs and at least a good portion (somewhere between half to all) of the attorney fees first. The court cost for Chapter 7 bankruptcy in Indiana at the time of publishing this blog is $338. Attorney fees in Indiana will vary based on the complexity of your case, ranging from about $1000 to $2500 in most cases.  You must generally pay the court cost and attorney fees before filing your Chapter 7 case.

A family or friend can help you pay for the court costs and attorney fees in your Chapter 7 bankruptcy. When a family or friend helps by paying some or all of the fees, it can help you file your case faster. It is common for family or friends to pay court costs or attorney fees. Usually, your bankruptcy law office can help you make these arrangements.  In such situations, the person who paid the fees for you will be listed in the Compensation Sheet for the bankruptcy.

Chapter 13 Bankruptcy

No absolute rule prohibits a family member or friend from paying for your Chapter 13 as well.  However, with Chapter 13 bankruptcies, it is less common for family or friends to pay for the court cost or attorney fees. There are a couple of reasons for this. First, Chapter 13 bankruptcies are sometimes filed with $0 down on the attorney fees. Instead of paying the attorney fees upfront, the attorney fees are paid throughout the life of the Chapter 13 bankruptcy plan. In such cases, the clients can usually pay the court cost of $313 to get the case started.

In addition, another reason why it is rare for friends and family members to pay for Chapter 13 bankruptcies is that this type of bankruptcy requires a monthly payment for 3-5 years. Debtors are also required to be regular income earners. Since Chapter 13 bankruptcy is a repayment plan, the debtor can usually pay the court costs. The burden of the court cost usually is not so much for Chapter 13 filers.  In cases where $1,000 to $3,000 is charged down on the Chapter 13 bankruptcy, a mortgage is usually far behind in payments. In these situations, sometimes family or friends can help.  However, many times the filer will already be saving money to bring the house back up to date.

Remember, a debtor can have a friend or family member still help pay for even Chapter 13 bankruptcy.  It is just a lot rarer because of the above reasons.   Sometimes even a friend or family member will help pay for the entire 3-5 years it takes to finish the plan.  However, your bankruptcy income and expense sheets will need to reveal that a family member plans to help with the ongoing payments.

Remember that many attorneys offer easy payment plans to help make Chapter 7 bankruptcy more affordable. If you live in Indiana and are looking for an affordable bankruptcy attorney, Bymaster Bankruptcy Law Offices can help. Schedule your free consultation today.

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