By Cara O'Neill, Esq.
The truth is that bankruptcy law is full of pitfalls for the unwary, and many attorneys will not handle bankruptcy cases for that very reason.
In fact, even the United States Bankruptcy Court clearly suggests retaining a bankruptcy lawyer by saying, “Bankruptcy has long-term financial and legal consequences - hiring a competent attorney is strongly recommended.”
If you are considering filing your own petition, you may want to review the following list of some of the common problems experienced when filing without an attorney. In both the long and short run, hiring a bankruptcy lawyer may be cheaper than you think.
1. Losing Money and Property
Debtors filing in pro se often don’t understand what property they are allowed to keep and what they cannot. One of the most common problems occurs with bank accounts. A bankruptcy trustee is not concerned with the logistics of personal finances. If a debtor has more money in the account than she can exempt, it doesn't matter whether it is due to outstanding checks, the debtor may lose that money.
2. Incurring Lawsuits Through Inadvertent Fraud
Many debtors don’t understand the rules regarding credit card use prior to filing a bankruptcy petition. In most instances, using a credit card within 90 days prior to filing is considered fraud per se. In this situation, a creditor may file a lawsuit against a debtor, which is not something any debtor wants to face.
3. Dismissal of Petition
When forms are not properly filled out, or if proof of a debtor education course is not filed with the bankruptcy court, the petition may be dismissed. When this happens, the automatic stay that prevents creditors from collecting debts is lifted. The debtor may also have to wait before re-filing the petition and will have to pay an additional filing fee.
4. Filing a Second Time
Sometimes a second bankruptcy needs to be filed. While this isn’t unusual, it can be tricky. Whether it is a Chapter 7 or a Chapter 13 case, if a petition is filed prematurely, the debtor runs the risk of having his property liquidated and distributed to creditors without receiving a discharge. Losing property and retaining debt is not the situation most debtors want to find themselves in.
These are only a few of the many problems that a competent bankruptcy attorney can easily avoid. When weighing the cost of legal services against the benefit of the thousands of dollars in potential debt relief, it simply makes sense to enlist professional help when filing for bankruptcy.
United States Courts: Filing for Bankruptcy Without an Attorney
Tags: Chapter 7 Bankruptcy, bankruptcy attorney, chapter 13 bankruptcy, Filing Chapter 7