Filing for bankruptcy yourself, or without an attorney, is known as filing bankruptcy “pro se”. Representing yourself throughout the bankruptcy process is a risky decision and there are a number of pitfalls associated with the same. Filing for bankruptcy has a complex set of rules, forms, statutes, and judicial decisions.
Some people choose to represent themselves because they think they cannot afford to hire a bankruptcy attorney, or they may think they have a simple case. Whatever the reasoning, it is not a wise decision. Even the simplest bankruptcy case could soon become complicated, resulting in the filer’s case being dismissed or thrown out. Often it is worth the extra cost to hire a professional to assist the consumer in filing for a Chapter 7 or Chapter 13 consumer bankruptcy as it saves a lot of hassle in the long run.
Filling out the initial bankruptcy paperwork is extremely important at the start of the case. Certain pitfalls will almost always result in the case being thrown out. These pitfalls include failing to file all required financial documents and court forms, failing to disclose important financial information, failing to protect certain property using bankruptcy exemptions, and failing to take all required education courses. A bankruptcy attorney who handles these types of cases on a regular basis will be less likely to make these mistakes than a filer who is handling the case pro se.
Another situation where a bankruptcy attorney is almost always needed is if the consumer has a complicated Chapter 7 bankruptcy case. For example, he or she may own a small business or have income above the median level for the State of Florida. Additionally, if the filer has priority debts or nondischargeable debts, it may be helpful to hire the assistance of a bankruptcy attorney to work through these more difficult legal issues.
Chapter 13 bankruptcy cases require more work and can be more complicated than a Chapter 7 bankruptcy case. The filer may want to use a Chapter 13 repayment period to catch up on mortgage arrears or may want to reduce a loan or pay back a debt that will not go away in bankruptcy over time. A bankruptcy attorney will know how to handle these situations and will work closely with the bankruptcy trustee to ensure that the consumer’s goals in bankruptcy are all met.
Chapter 13 bankruptcy cases can also be difficult because, in addition to the initial bankruptcy forms required for all cases, the filer must draft a proposed repayment plan, describing how he or she intends to repay creditors over the terms of the repayment period. Without knowing the bankruptcy laws, drafting this plan can be extremely difficult and problematic for pro se filers, which is why many Chapter 13 pro se cases are thrown out before they even get started. Avoiding these issues will make the process much smoother for the filer.
While many bankruptcy cases move along predictably and smoothly, complicated issues can arise along the way. For example, a motion or adversary action may need to be filed within the original bankruptcy action. Any time an adversary action is involved, an attorney is almost always recommended. These adversarial actions can involve a creditor disputing the automatic stay or fighting the terms of the repayment plan or can include the filer attempting to discharge a traditionally nondischargeable debt, such as student loans. Because these types of actions can become complicated very quickly, an attorney is always recommended to help along the way.
Failure to understand the above concepts will be problematic if a creditor challenges the dischargeability of a debt or if the bankruptcy trustee alleges you have committed fraud—or anything else that could crop up during the case. When you find yourself on the receiving end of a complaint or motion, an attorney is essential to your success.
If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.