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Americans Too Broke to File For Bankruptcy

It's a common complaint amongst the broke -- you're simply too poor to file for bankruptcy. It may be true. New data submitted to the National Bureau of Economic Research suggests that the cost of bankruptcy will prevent between 200,000 and 1 million Americans from filing this year.

Another 200,000 are expected to rely on their tax returns to cover the fees.

Bankruptcy, on average, costs about $1,500, according to CNNMoney. Though some of this covers court fees ($300), credit counseling and education courses, the rest is paid to the attorney.

People being too poor to file for bankruptcy is not new. In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, which CNNMoney describes as an attempt to "reduce the number of bankruptcies taking place." It added significantly more paperwork to the process, causing the cost of bankruptcy to skyrocket.

Combine that with the recession and you've got a lot of people who can't afford to get out of debt.

This doesn't mean that these people -- and you -- have no options. If you're really too poor to file for bankruptcy, you may qualify for legal aid or pro bono services. You can petition the court to waive the filing fees. A bankruptcy attorney may also be willing to take monthly payments.

Though tempting, preparation services are not a great idea -- they can't give you sound legal advice. Going at it alone is also not the best of options, even though 8% of Chapter 7 filings are done without an attorney. A poorly filed petition is bound to be dismissed. However, it's possible to hire an attorney to look over your paperwork.

Don't prematurely decide that you're too poor to file for bankruptcy. Call a few bankruptcy attorneys and weigh your options. Many offer free consultations.

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