If you want to file for bankruptcy, but don't have the cash to pay your lawyer, you’re likely wondering if you can pay with a credit card. The answer is no—but your friends and family can fund your legal services with a credit account of their own.
Find out why a bankruptcy attorney won’t accept your credit card payment for legal fees but will accept a credit card payment from someone else.
Bankruptcy law prohibits attorneys from advising you to incur more debt on the eve of a bankruptcy filing—and that includes charging services on a credit card or taking out cash advances (more below). This is true even if you intend to pay the credit card charges. You’re still incurring debt when the bankruptcy attorney processes the charge.
Some attorneys, however, accept debit cards because those amounts come directly from your checking account deposits. Attorneys can also take credit cards from friends or relatives who are willing to pay the fee for you. The only requirement is that you disclose who paid for your legal services in your bankruptcy paperwork.
Learn more about what you should expect from your bankruptcy lawyer.
Lawmakers recognize that some people considering filing for bankruptcy could be tempted to run up debts before filing a case—and that wouldn’t be fair to creditors. Bankruptcy law has provisions that make many of those last-minute debts potentially nondischargeable.
For instance, there are two ways a creditor could challenge a charge made shortly before filing:
In either case, the creditor could file an adversary proceeding (lawsuit) in your bankruptcy case to challenge the discharge of the debt. Keep in mind that it is permissible to charge necessary items, such as food and needed clothing.
Many bankruptcy attorneys offer payment plans for fees. Even if your attorney will allow you to pay your fees with a plan, if you’re filing a Chapter 7 case, it’s unlikely that the lawyer will file your case until you’ve paid the entire fee.
If you don’t have the cash to pay the costs of your bankruptcy services, consider these alternatives:
To learn more about paying your bankruptcy lawyer, see Options If You Can’t Afford a Chapter 7 Bankruptcy Lawyer.