Legally you do not need a lawyer to file for bankruptcy. Individuals can file for bankruptcy without a lawyer. This is called filing pro se. The forms you need to file can be obtained from your local court. While filing the paperwork may appear relatively easy to accomplish, making a mistake in filing could cost you thousands of dollars in assets, denial by the courts of the discharge of your debt, and can even place you in legal jeopardy for fraud.
While it may be tempting to try to save money and navigate the bankruptcy process by yourself, most professionals that are knowledgeable on bankruptcy issues recommend against filing pro se.
According to the U.S. Courts website, “seeking the advice of a qualified lawyer is strongly recommended because bankruptcy has long-term financial and legal consequences.”1
Understanding what a lawyer does for a client filing for bankruptcy helps clarify why seeking a lawyer’s assistance in bankruptcy proceedings is important. There are a lot of critical decisions to make that start even before you actually file for bankruptcy.
Choosing the Right Debt Solution
The first major decision is whether bankruptcy is the right solution for your particular situation. A bankruptcy attorney will help you examine your debts and assets and will counsel you on whether bankruptcy is the best approach or if other options may be available to you. If the bulk of your debts, for instance, are student loans, which are not eligible for bankruptcy protection, filing for bankruptcy would not be a good option.2
The next key decision, if bankruptcy is determined to be the best option in your case, is which type of bankruptcy to file. The bankruptcy process is governed by the federal court system. Chapter 7 and Chapter 13 are the most common options available to individuals. Each option has its own advantages and disadvantages.
A Chapter 7 bankruptcy is the fastest and can usually be accomplished in three to five months.3 It allows you to eliminate many types of unsecured debt, such as medical bills and credit card payments. In a Chapter 7 bankruptcy you will have to sell assets except for those covered by state or federal exemptions. A Chapter 7 bankruptcy filing doesn’t provide a way for you to catch up on missed mortgage payments to avoid foreclosure or repossession.4
A Chapter 13 bankruptcy makes it possible, if it is determined you have the means, for you to repay your debts following a court-approved payment plan which usually can be done over a three- to five-year period. You can keep most of your assets and even pay all or a portion of your attorney fees through the repayment plan. Basically, Chapter 7 is focused on liquidation to pay debts and Chapter 13 is focused on reorganization to pay debts.5 Issues like whether you file individually or jointly with a spouse, the impacts on co-signers of any loans you incurred, and other considerations are areas about which a qualified attorney can provide expert advice.
Knowing What Not to Do
Before you file for bankruptcy your attorney will help you avoid one of the common mistakes people make when filing for bankruptcy on their own. This is a requirement that you complete a pre-bankruptcy credit counseling class within the 180 days before your bankruptcy filing. If you file for bankruptcy without taking the class a judge has little option but to dismiss the case and the filer is out hundreds of dollars in court costs. An experienced bankruptcy attorney can also provide advice on timing filings so you can keep tax refunds and protect bank accounts and other assets. They will also provide advice on why it’s not a good idea to repay debts to family or try to hide assets by selling them to family or friends prior to filing for bankruptcy.
Your attorney will file the necessary paperwork and will guide you through the entire bankruptcy process, filing any additional documents requested by the courts and responding to deadlines. Your attorney will attend and represent you at all mandatory hearings, including the 341 meeting of creditors. A creditor can object to your bankruptcy filing and an experienced attorney with an in-depth understanding of your circumstances, and knowledge of local courts, can prove invaluable if your filing is challenged.
Filing for bankruptcy, or even thinking about filing for bankruptcy, is an emotionally charged experience. Having a bankruptcy attorney guide you through the process can go a long way in relieving some of the pressure and anxiety inherent in the process and in restoring your peace of mind.
Hines Law Offices is full-service bankruptcy firm that handles all types of debt relief matters to the residents of Massachusetts. With 20 years’ experience and knowledge in personal bankruptcy cases, we are committed to safeguard your interests and help gain financial control of your future. Our bankruptcy attorneys specialize in Chapter 7 and Chapter 13 cases as well as help implement a financial rebuilding plan. Hines Law will provide the right solution to your case. Call today for a Free Consultation!
1 Bankruptcy, www.uscourts.gov