German YusufovJune 7, 2025

Money problems can hit hard, whether you run a small shop in Mesa or juggle medical bills in Tucson. When debt piles up, bankruptcy may feel like the only way out, yet the cost and paperwork can seem just as scary.

At Yusufov Law Firm PLLC, we serve neighbors in Phoenix, Mesa, and Tucson who need straight answers. This article explains what help, if any, the government gives when you file so that you can decide your next step with clear facts.

Overview of Government Involvement in Bankruptcy

Bankruptcy is not a private program. It is a legal process created by Congress and found in the U.S. Bankruptcy Code. Federal judges and clerks run the U.S. Bankruptcy Courts, and every Arizona case travels through these courts, no matter where you live in the state.

The government’s primary role is to provide the courtroom, the rules, and the officials who apply those rules. Judges sign orders, clerks maintain dockets, and court-appointed trustees review paperwork. While this system makes relief possible, it does not usually put money in your pocket to pay the fees.

Direct Financial Assistance from the Government

The first question people ask is simple: Will Uncle Sam cover the cost of my case? In most circumstances, the answer is no. You remain responsible for filing fees, credit courses, and lawyer charges. Still, two limited programs may lower or remove part of the bill.

Fee Waivers

Chapter 7 filers with very low income can ask the court to waive the $338 filing fee. Household earnings must be below 150 percent of the federal poverty guideline to qualify. The judge reviews pay stubs, benefits statements, and monthly expenses before approving or denying the request. When granted, the court simply absorbs the cost, so you do not have to pay later.

A waiver only covers court charges. You still need to finish credit counseling and debtor education, though those providers may drop or cut their prices if you send proof of the same low-income status.

Because Chapter 13 involves a multi-year plan, the statute does not allow a full waiver, but the judge can let you pay the $313 fee in up to four installments.

Legal Aid Societies

While not part of the court itself, Legal Aid organizations receive federal grants through the Legal Services Corporation. These groups sometimes help with Chapter 7 petitions at no or low cost. In Arizona, Community Legal Services and Southern Arizona Legal Aid maintain clinics that guide income-qualified residents through forms, creditor lists, and hearings.

If you do not meet their income limits, they can still provide referrals to volunteer panels that might offer a reduced flat fee. Always apply early, as free slots fill fast.

Indirect Government Assistance and Resources

You might not get a check from the Treasury, yet several agencies oversee and provide information that keeps the process fair. Knowing who they are can help you use their tools wisely.

U.S. Trustee Program

This branch of the Department of Justice watches over Chapter 7, 11, 12, and 13 cases. Case trustees review your paperwork, hold the 341 meeting, and ensure creditors and debtors follow the Code. They do not represent you, but they answer procedural questions and can flag abusive collection actions.

The Trustee’s office also keeps the approved list of credit counseling and debtor education providers, so you can check legitimacy before paying any fee.

Bankruptcy Courts

The federal judiciary hosts free forms, rules, and a county finder on its website. You can download every schedule, petition, and disclosure without charge, then file them either on paper or through an online system if you are working with a lawyer. Court clerks cannot give legal advice, yet they will explain filing hours, accepted payment types, and how to request copies.

IRS and Bankruptcy

The Internal Revenue Service becomes one of your creditors for debts that include back taxes. IRS Publication 908, Bankruptcy Tax Guide, breaks down how returns, refunds, and payment plans fit into a bankruptcy case. The agency reminds filers to keep all current returns filed on time or risk dismissal. If you need to confirm that the IRS received notice of your case, you may call its Centralized Insolvency line at 800-973-0424.

Understanding the Costs Associated with Bankruptcy

Even with limited aid, it helps to know the price tag before you start. Court charges, courses, and lawyer fees make up the bulk of expenses.

Filing Fees

As of 2025, the U.S. Courts list the following fees:

Expense Chapter 7 Chapter 13
Court filing fee $338 $313
Credit counseling $10 – $50 $10 – $50
Debtor education $15 – $50 $15 – $50

 

Course providers must offer a sliding scale if you show that your household income is under 150 percent of the poverty line. Always ask, and keep proof of your request.

Credit Counseling and Debtor Education

Every consumer filer must finish an approved counseling session before the case starts and a debtor education class before discharge. These can be taken online, by phone, or in person. If you qualify for a court fee waiver, most providers will match that decision and drop their charge.

Attorney Fees

Legal fees can vary depending on the type of bankruptcy, how complex your case is, and where you file. In Arizona, attorneys often charge a flat fee for simpler Chapter 7 cases, typically paid before your case is filed. For Chapter 13 cases, lawyers may structure payment differently, taking part of the fee up front and the rest through your court-approved repayment plan.

You also have the option to file without a lawyer, known as filing pro se. While this can reduce your upfront expenses, it means taking full responsibility for preparing your paperwork, attending hearings, and responding to legal objections. Filing on your own is possible, but it carries risks, especially if your case involves property issues, complex debts, or challenges from creditors.

Bankruptcy Options in Arizona

The right chapter shapes both relief and cost. Here is a short look at the most common choices for residents and local businesses.

Chapter 7 Bankruptcy

Often called straight bankruptcy, Chapter 7 allows a trustee to sell non-exempt assets and pay creditors. Many filers keep all assets because Arizona exemptions protect household goods, car equity up to a dollar cap, and certain retirement accounts. The process usually finishes in four to five months.

Chapter 13 Bankruptcy

Chapter 13 sets up a three- to five-year repayment plan that pools disposable income, catches up mortgage arrears, and strips off certain liens. Once the plan ends and all required payments are made, remaining eligible debts are wiped out.

Chapter 11 Bankruptcy

Chapter 11 is open to individuals and companies but is commonly used by businesses that wish to restructure while staying open. Filers propose a plan that must be voted on by creditors and approved by the court. Though paperwork is heavier, new Small Business and Subchapter V rules can cut time and cost for businesses that meet the applicable debt ceiling.

Need Assistance with Bankruptcy in Arizona? Contact Yusufov Law Firm PLLC

Facing debt brings stress, yet you do not have to face it alone. Yusufov Law Firm PLLC listens to your story and crafts a plan that fits your income, assets, and goals. Whether that plan involves Chapter 7, Chapter 13, or another path, we walk with you each step.

Feel free to call us in Tucson at (520) 745-4429 or in Mesa/Phoenix at (480) 788-0098 or visit our Contact Us page to book a consultation. We serve clients across Tucson, Mesa, and Phoenix and aim to help you regain financial balance with clear guidance. Acting sooner often opens more options, so reach out today and discuss your next move.