Are You Too Broke to Go Bankrupt?

Why you need a lawyer to file for bankruptcy—and how to get one for free.

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Through ABI, you'll find lawyers like John Hargrave, who provides pro bono bankruptcy counseling through the Rutgers Law School Bankruptcy Pro Bono Project. "I've always regarded the practice of law as having an obligation to give something back to the community," Hargrave says. Through the project, Hargrave advises people who are living off Social Security, unemployment, disability, or are earning very little in the way of minimum-wage jobs.

[See Tips for Maximizing Your Credit Score When It Counts Most.]

When consulting a lawyer, Robert Lawless, a law professor at the University of Illinois who specializes in bankruptcy, says it's important to find an attorney who will not only help you file for bankruptcy but also try to solve your debt problems. He says, "The attorney should talk about your goals and look at what all your options are." Another low-cost resource is the National Foundation for Credit Counseling, which provides affordable financial services to help people manage their debt.

Corrected on 07/26/2012: A previous version of this article misstated how assets are allocated for Chapter 7 bankruptcy. Assets that are non-exempt are turned over to a trustee, who then allocates funds to your creditors.