Filing Bankruptcy With No Money: What Actually Exists in New York

Bankruptcy is not free, so start with the number. The court filing fee for Chapter 7 is $338 — $245 filing, $78 administrative, $15 trustee surcharge. Chapter 13 is $313.

If you cannot pay that at once, two things are possible:

• Installments. Bankruptcy Rule 1006(b) lets an individual filer spread the fee over no more than four payments, all due within 120 days of filing, with the court able to extend the last one to 180 days. Available in both chapters, on Official Form 103A.
• A full waiver. Rule 1006(c) and 28 U.S.C. § 1930(f) let a judge waive the fee outright — but only in Chapter 7, and only if your household income is below 150% of the official poverty line for your family size and you cannot pay even in installments. Official Form 103B.

A trap sits inside Rule 1006(b): until the filing fee is paid in full, no further payment may go to an attorney or anyone else providing services in the case. On installments, you cannot pay your lawyer first.

One thing to be clear about up front: this office does not file bankruptcy petitions. The numbers here are general information, so you can judge whether bankruptcy is worth pursuing at all and who to call if it is.

Court fees are the small number. Attorney fees are the barrier, and the two chapters run in opposite directions.

In Chapter 7, fees for pre-filing work are themselves dischargeable, so lawyers generally want payment in full before the case is filed. Commercial surveys — not court data — put New York Chapter 7 attorney fees roughly between $795 and $2,400. Treat any online figure as an estimate, not a quote.

In Chapter 13, most of the fee is paid through the plan. In the Northern District of New York the court publishes a presumptively reasonable base fee of $3,500 to $6,500, set at retention according to how complex the case is. Practice differs elsewhere in the state, so ask any attorney you consult how their fee is structured and how much has to be paid before filing. [CONFIRM CURRENT EDNY CHAPTER 13 NO-LOOK FEE PRACTICE]

So the cheaper chapter costs more cash today, and the chapter a homeowner needs is the one with no fee waiver.

This matters more than the fee arithmetic. The wrong chapter can cost you both the money and the house.

• Chapter 7 does not cure arrears. The discharge wipes out personal liability on the note. The mortgage lien survives it, and the lender can still foreclose. Discharge typically issues 60 to 90 days after the date first set for the meeting of creditors, and the stay protection generally ends with it.
• Only Chapter 13 can cure. 11 U.S.C. § 1322(b)(5) lets a plan cure the default over a reasonable time while you maintain the regular payment.
• Chapter 13 cannot lower a normal mortgage payment. Section 1322(b)(2) bars modifying a claim secured only by your principal residence. The plan restructures arrears, not the loan.
• Plan payments start fast. Under § 1326(a)(1) they begin within 30 days of filing, before any judge has confirmed the plan. As arithmetic: $30,000 of arrears spread over 60 months is roughly $500 a month, on top of the resumed mortgage payment and the fees paid through the plan.

An analysis of federal court data published in the ABI Journal looked at 123,185 Chapter 13 cases filed and closed between fiscal 2010 and 2016. About 39% of them ended in a completed plan. Broken out: 41.5% of the cases filed with an attorney, 2.3% of the cases filed without one, and 24.8% of the cases in which the filing fee had not been paid in full at filing. Those are national figures from a closed-case sample, not a prediction about any individual case.

Again: this firm does not file bankruptcy petitions. If bankruptcy is the right tool for you — steady income, arrears you could realistically catch up over three to five years — speak to a bankruptcy attorney.

Some of the most useful help costs nothing.

• The Homeowner Protection Program (HOPP). New York funds a statewide network of more than 90 housing counseling and legal services organizations providing free representation at foreclosure settlement conferences and in court. Hotline (855) 466-3456; homeownerhelpny.org. The program is funded budget to budget and has never been permanently written into law. [CONFIRM CURRENT HOPP GRANT CYCLE STATUS BEFORE PUBLICATION]
• Court-assigned counsel. Under CPLR 3408(b), a homeowner who appears at the settlement conference without a lawyer is deemed to have made a motion to proceed as a poor person. You file nothing to trigger that — you show up. Whether counsel is actually assigned is the court's decision: it determines eligibility, may appoint a lawyer, and may adjourn so that attorney can appear.
• The agencies named in your own paperwork. The 90-day notice under RPAPL § 1304 must list at least five government-approved housing counseling agencies serving your county, with addresses and phone numbers, plus the Attorney General's hotline, 1-855-HOME-456.
• Pre-filing credit counseling. 11 U.S.C. § 109(h) requires a briefing from an approved nonprofit agency within the 180 days before filing; the approved list is published by the U.S. Trustee Program. The exigent-circumstances waiver is narrow — 30 days, extendable to 45.
• [LOCAL PRO BONO BANKRUPTCY CLINIC AND BAR ASSOCIATION REFERRAL LINES — NASSAU AND SUFFOLK]

One thing to cross off immediately: the New York State Homeowner Assistance Fund is closed to new applications and is no longer serving its waitlist.

New York is a judicial foreclosure state. A lender cannot sell your home without suing you in court and obtaining a judgment.

Before filing, the lender or servicer must send the RPAPL § 1304 notice at least 90 days ahead. Strict compliance is a condition precedent, and a defective notice can require dismissal of the complaint. Once proof of service is filed with the county clerk, CPLR 3408 requires a settlement conference within sixty days. Both sides must negotiate in good faith, and the lender must bring the payment history, an itemization of what it takes to cure and to pay off, the loan documents, and the loss mitigation options with the reasons behind any denial.

Two deadlines matter. Under CPLR 320(a) you generally have 20 days to answer after personal service in New York and 30 days for most other forms of service. Attending a conference or applying for a modification is not an answer. If you missed the deadline, CPLR 3408(m) is a genuine second chance: a defendant who appears at the conference is presumed to have a reasonable excuse and may file an answer within thirty days of that appearance, with no substantive defenses waived and the default deemed vacated.

That runway is time to work the case. Foreclosure defense means appearing at every proceeding and testing whether the lender did what the law required. A loan modification may change the rate or the term or capitalize arrears into the balance, depending on the investor and your circumstances. Our answers library covers each option.

In rough order of urgency:

• Open every envelope and keep the paperwork. The 90-day notice and the summons each start a clock. Note the date each one arrived.
• Call the HOPP hotline at (855) 466-3456. Free counseling, and in many cases free legal representation.
• Go to the settlement conference even with no money and no lawyer, and ask the court to assign counsel under CPLR 3408(b).
• Do not pay a non-attorney anything up front. Real Property Law § 265-b bars a distressed property consultant from charging or accepting any payment, escrow included, before every promised service is fully completed, and gives you five business days to cancel. Nobody legitimate needs your deed or a power of attorney.
• If a sale date is set, work to the auction date. In New York the cutoff for most options, including a bankruptcy cure under 11 U.S.C. § 1322(c)(1), is the auction itself — not the judgment, the referee's deed, or the eviction.
• If arrears are the only problem and your income is steady, call a bankruptcy attorney. That is what Chapter 13 was built for; this office does not handle it.

This page is general information, not legal advice about your situation. If you would like someone to read your paperwork and talk through what options may remain open, consultations here are free. Call 516-719-4144 or reach the office, and bring the notices you have received.

Can I file Chapter 7 with no money at all in New York?

Sometimes. A judge may waive the $338 Chapter 7 filing fee under 28 U.S.C. § 1930(f) if your household income is below 150% of the official poverty line for your family size and you cannot pay even in installments. You apply on Official Form 103B. If you do not qualify, you can still ask to pay in up to four installments within 120 days.

Is there a filing fee waiver for Chapter 13?

No. The waiver under 28 U.S.C. § 1930(f) applies only to Chapter 7. Chapter 13, the chapter with a mechanism to cure mortgage arrears, costs $313 and has no waiver. You can ask to pay in up to four installments within 120 days. Until that fee is paid in full, no further payment may go to your attorney.

Can I get a free lawyer for a foreclosure case in New York?

Possibly. Under CPLR 3408(b), a homeowner who appears at the mandatory settlement conference without counsel is deemed to have made a motion to proceed as a poor person. The court determines eligibility and may appoint a lawyer, adjourning the conference so that attorney can appear. New York's Homeowner Protection Program network also offers free help at (855) 466-3456.

Will filing Chapter 7 stop my foreclosure for good?

No. Filing triggers the automatic stay, which halts a scheduled sale, but Chapter 7 has no way to force a lender to accept arrears over time. The discharge cancels your personal liability on the note; the mortgage lien survives it. Discharge usually issues 60 to 90 days after the date first set for the meeting of creditors.

How late can bankruptcy still stop a foreclosure sale in New York?

The cutoff is the auction itself, not the judgment, the referee's deed, or the eviction. 11 U.S.C. § 1322(c)(1) allows a default on a principal residence to be cured only until the residence is sold at a foreclosure sale. New York bankruptcy courts have held that a filing made after the auction does not revive the homeowner's extinguished interest.

Can a company charge me up front to stop my foreclosure?

Not if it is a non-attorney consultant. New York Real Property Law § 265-b bars a distressed property consultant from charging or accepting any payment, including funds held in escrow, before every promised service is fully completed. You also have five business days to cancel. The Attorney General may seek civil penalties of up to $10,000 per violation.