Lots of people file for bankruptcy without an attorney. In some districts, nearly 30 percent of bankruptcy filings are by pro se litigants (the legal term for “filing on your own”).
Some people represent themselves because they can’t afford an attorney. Others have simple cases and don’t feel they need to hire an attorney. But representing yourself is not wise in every case. In this blog, you’ll learn about some of the most common problems in bankruptcy cases filed without an attorney.
In many cases, problems arise even before you file for bankruptcy.
- Not needing to file. Some people file for bankruptcy because they don’t understand bankruptcy, or what their alternatives are. For example, you might hope it will wipe out debts that don’t go away in bankruptcy.
- Filing the wrong chapter type. For most people, the logical choices are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Each type solves particular problems, and property is treated differently in each chapter. For example, if you want to save your home from foreclosure, Chapter 13 might be the best choice. If you have low income and no assets, Chapter 7 is likely the best way to go. If you file for the wrong chapter, you might lose valuable property, or end up not discharging (wiping out) certain debts.
Filling Out Bankruptcy Paperwork
Even if you choose the right chapter, pitfalls abound in the paperwork phase of bankruptcy.
- Failing to file required documents. Bankruptcy is form-driven. You’ll have to complete a lengthy federal packet, and, in some cases, your court will have local forms. Many self-represented bankruptcy debtors don’t file all of the required bankruptcy documents, which can result in a dismissal of the case.
- Failing to protect property. You don’t lose everything in bankruptcy. Property exemptions play an important role in protecting property in both Chapter 7 and Chapter 13 bankruptcy. But, many pro se filers don’t list the proper exemption to keep an item of property. As a result, you risk losing it. If you stand to lose valuable property (like your home or car) or property you care about (like a family heirloom), a visit to an attorney would be worth the money.
- Failing to take required education courses. In Chapter 7 and Chapter 13 bankruptcy filers must receive credit counseling from an approved provider before filing for bankruptcy, and complete a financial management course before getting a discharge. Many pro se debtors fail to file the proper certificate, which can result in a dismissal of the case.
Motions or Adversary Actions
Most Chapter 7 cases move along predictably: you file for bankruptcy, attend the 341 meeting of creditors, and then get your discharge. But, that’s not always the case. Complicated issues can arise that most pro se filers aren’t prepared to handle. For example, many self-represented filers:
- Don’t understand the significance of motions for adversary actions
- Can’t adequately defend against an action seeking to deny discharge
- Sometimes file illegible or handwritten motions or responses.
Failing to understand these concepts will be an issue if a creditor challenges the dischargeability of a debt or if the bankruptcy trustee — the official who oversees your case —alleges that you’ve committed fraud. When you find yourself on the receiving end of a complaint or motion, an attorney is essential.
How to Get Help With Your Bankruptcy
If you decide to file for bankruptcy on your own, find out which services are available in your district for pro se filers. Some bankruptcy courts hold pro se clinics with an attorney. Others can connect you with legal aid organizations. Many courts have information for consumers filing for bankruptcy, including brochures describing low-cost or free services, as well as detailed information about bankruptcy. A solid self-help book is also extremely helpful. In addition to how-to details, it will let you know when you should talk to an attorney.
You also might be able to find an attorney who will provide advice without full representation; most bankruptcy attorneys will meet with you for free for an initial consultation.
That might be enough for you to learn that bankruptcy is not for you, to determine which chapter is best for you, or to realize that you have issues that might make filing on your own a bad idea.
For a more detailed explanation of your bankruptcy options, let’s schedule a consultation today.
Moshier Law Office, PLLC
St. Paul, Minnesota