If you are struggling financially and considering filing for bankruptcy protection, you may be trying to decide if you really need an attorney.
What is “pro se” filing?
Many people assume they will save a significant amount of money if they do not use a lawyer to represent them in their bankruptcy case. This is referred to as filing “pro se” or without being represented by a lawyer. In many pro se cases, the debtor ends up losing significantly more money than if they had hired an attorney.
How does this happen? Bankruptcy law is confusing, plus court procedures and rules are strict. There is a reason lawyers spend years in school learning how to represent you! Although the Internet is full of websites claiming they can help you “do it yourself,” nothing can replace an educated human standing by your side and prepared to handle your unique circumstances. Many websites and books are not updated regularly or do not comply with your jurisdiction’s specific requirements. Plus, a local bankruptcy lawyer is known by the trustees and judges that will be supervising your case, which can help ensure that your case goes smoothly.
Below are a few general areas where pro se debtors typically make errors in their filing:
- Means test. The means test is not really a “test.” It is a formula used by the bankruptcy court to decide whether or not you qualify to file a Chapter 7 case. The formula is complex and has numerous factors that must be considered. If you do not apply the means test correctly, it could result in you not being able to file a Chapter 7 or your case being converted to a Chapter 13 case, which means you will end up surrendering five years of disposable income. The debtor does not have a right to dismiss a case under Chapter 7. You can file a motion to dismiss a Chapter 7 case, but the motion will probably be denied on the trustee’s objection if you had non-exempt assets or were a good candidate for a Chapter 13. It is important to remember that once you have filed for bankruptcy relief you are no longer driving, the Court is, and the trustee is navigating. The destination is you being debt free, but the trustee is tasked with finding the route that gets your unsecured creditors paid as much as possible. Chapter 13 is a tremendous tool to save property that has been pledged as security for debt, but if you have no such property and are forced into it, it can feel like indentured servitude. Good bankruptcy attorneys can determine whether you will qualify for Chapter 7, or would be better served by a Chapter 13, or would be better off not filing at all. It is important to have the information necessary to make that decision before you file and surrender control.
- Deadlines. There are a wide variety of deadlines that must be met in your bankruptcy filing. The deadlines can vary between jurisdictions, but missing a deadline typically has serious consequences. It is common for a pro se debtor to miss strict deadlines that result in their case being dismissed.
- Exemptions. Federal and state laws provide exemptions that protect your assets from being included in your bankruptcy estate. However, you must properly claim the exemptions in order to take advantage of them and to keep possession of the exempt assets. Failure to properly exempt an asset may result in it being seized by the trustee to pay your creditors. A knowledgeable bankruptcy lawyer will help ensure that all of the applicable exemptions are properly claimed in your case, which maximizes the amount of your assets that are kept safe.
- Saving Money? Many people think they will save money by not hiring an attorney. If you have non-exempt assets you will surrender them to the trustee. If you use non-exempt assets to pay a bankruptcy attorney, you are paying the lawyer with money you would have surrendered anyway.
If you are considering filing a personal bankruptcy case, contact us for a free consultationto learn how we can save you money and help you avoid the numerous obstacles that pro se debtors often encounter.
The information on this blog or any blog is not intended as, and should not be taken as, legal advice.