We are sometimes asked if someone is able to file bankruptcy without an attorney. The adage that “he who represents himself has a fool for a lawyer” does hold some truth. In particular for bankruptcy it is in your best interest to seek out the advice and services of an experienced attorney. On Craigslist you can find any number of paralegal services and online bankruptcy providers who are operating not under the supervision of an attorney who try to characterize filing for Bankruptcy as “just filling out forms.” This is as far from the truth as tax preparation without instructions for the non-professional or drafting your will or trust as just filling out some forms.
Your assets are at risk in a botched bankruptcy and even if you feel that you don’t have assets just wait until the trustee takes what little assets you may have because you didn’t properly exempt it. Or if the trustee finds an issue with your bankruptcy and doesn’t grant you the discharge you so desperately need from your debt and creditors.
What Can Go Wrong in A Self Filing Bankruptcy?
The Bankruptcy Code has many situations in which dismissal of cases is automatic and the relief available when you re-file is strictly limited. The newer means test forms are complicated and easy to mess up.
Congress was upfront in the bankruptcy changes of 2005 that it wanted to discourage consumers from filing bankruptcy and made the process substantially more complex and the consequences of mistakes more costly.
In addition Chapter 13 is not well suited for debtors in pro per (which means you are representing yourself) since it has lots of unwritten rules and local customs that just aren’t easily discover-able to the layman or even the generalist lawyer. Corporations and partnerships cannot, by law, represent themselves.
Recent Example;
We recently had a client who was fortunate enough to have complete ARAG coverage for her bankruptcy filing. This means that she would not need to pay anything for the attorney fees to file her Chapter 7 bankruptcy case. She retained our firm and we started on the bankruptcy process. We kept following with her for the paperwork and documents we needed from her in order to proceed but we were unable to reach her. She finally called us back one day and told us that she had decided to file her bankruptcy on her own, so she would not be needing our assistance. She explained that she just filled out the “form” and that it didn’t seem that difficult.
This caught us by surprise because typically our clients do not even think about filing their bankruptcy on their own, she had never mentioned anything and she didn’t have to pay anything out of pocket. We asked her how it was going and she replied that she had only just filed her bankruptcy petition but that she didn’t anticipate any problems. We thanked her for letting us know and we closed her file and let ARAG know she had filed herself.
Two weeks later she called us in a panic and explained that she had messed up the paperwork and now they were telling her she had to amend it, but she didn’t understand why or what to do. She missed some exemptions too for her car and now the trustee was threatening to take it to pay her creditors. Her court hearing was the next week and she wanted someone to represent her there. We pulled her bankruptcy file and our experienced bankruptcy attorney examined it. It was not pretty. Her bankruptcy schedules were going to need significant amending and unfortunately since she had filed herself under the bankruptcy code if we appeared at the court hearing to represent her it would have made us responsible for the entire case, including the paperwork she had already filed that contained all of the errors. We had to let her know that unfortunately due to liability we could not assist her now.
Don’t let this happen to you.
We recommend that you visit a lawyer, get an overview of your situation and any issues that are presented in your case. Initial consultations are free.
Common Issues With Debtors Filing On Their Own
According to the Central District’s of California’s study on Pro Per Bankruptcy filers, here are some of the most common problems the court sees in bankruptcy cases where the debtor does not have an attorney:
1. Pre-bankruptcy Considerations; in many cases, problems arise even before the consumer files for bankruptcy.
2. Not needing to file for bankruptcy in the first place; some people file for bankruptcy because they don’t understand what bankruptcy can and cannot do, and what their alternatives are. They may think for example that filing will get rid of their student debt, or discharge a certain judgment debt that bankruptcy can’t discharge.
3. Filing under the wrong chapter; for most consumers, the logical choices are Chapter 7 bankruptcy and Chapter 13 bankruptcy. There are important differences between the two: not everyone qualifies for either or both, and each treats property and debt differently. For example, if you want to save your home from foreclosure, Chapter 13 might be your best bet. If you have low income and no assets, Chapter 7 may be the way to go. If you file for the wrong chapter, you might lose valuable property, or end up not discharging certain debts.
4. Filling Out and Filing the Petition, Schedules, and Other Documents; even if the debtor chooses the correct chapter to file under, pitfalls abound in the paperwork phase of bankruptcy.
5. Failure to file required documents; according to the Central District, many self-represented bankruptcy debtors do not file all of the required bankruptcy documents. In addition to the federal forms many courts also have local rules and forms.
6. Choosing incorrect property exemptions; property exemptions play a key role in both Chapter 7 and Chapter 13 bankruptcy and exemptions do change periodically. It is important to make sure you have the correct law and statute citation. If you’re unclear how to list or value a particular item of property, can’t figure out your equity in the property, own property with someone else, or stand to lose valuable property (like your home or car) or property you care about (like a family heirloom), a visit to an attorney may be well worth the money.
7. Not understanding the difference between credit counseling and financial management; in Chapter 7 and Chapter 13 bankruptcy you must receive credit counseling from an approved provider before you file for bankruptcy, and take a financial management course before you get a discharge. Many pro se debtors are confused about these requirements, and fail to file the proper certificate. Failing to comply with these requirements can result in dismissal of your petition or not getting a discharge.
8. Motions or Adversary Actions; in some Chapter 7 cases, you file for bankruptcy, attend the meeting of creditors, and then get your discharge. But in others, a creditor may challenge the dischargeability of a debt, the trustee may allege that you have committed fraud, or something else might crop up. In these situations, you may find yourself on the receiving end of a complaint or motion, or perhaps you want to file a motion (for example, to get student loans discharged). In these types of actions, often an attorney is essential to your success.
According to the Central District, many self-represented filers:
- do not understand the significance of motions for adversary actions
- are not able to adequately defend against an action seeking to deny discharge, and
- sometimes file illegible or handwritten motions or responses.
Contact An Experienced Sacramento Bankruptcy Attorney and Don’t Try to File Bankruptcy Without An Attorney
We are experienced Sacramento Bankruptcy Attorneys. We have helped thousands of individuals and businesses get the relief they need from their creditors through the use bankruptcy by filing a Ch. 7, Ch. 13, credit card debt negotiation or debt settlement and have successfully dealt with adversary proceedings brought by difficult creditors. Our bankruptcy attorneys have achieved proven results and can give you the great legal advice and strategy needed to get you the results you want. Contact us today to schedule your complimentary attorney consultation by clicking HERE or by calling 916-999-1376. We look forward to helping you with all of your Sacramento bankruptcy needs.
