Do It Yourself Chapter 13: Should You File Without an Attorney?

Filing for Chapter 13 bankruptcy on your own is rarely a good idea.

By , Attorney

Hiring an attorney to represent you in a Chapter 13 bankruptcy can be expensive. But unfortunately, representing yourself in Chapter 13 bankruptcy can be very difficult (much more so than filing for Chapter 7 bankruptcy on your own). The incidence of successful do-it-yourself Chapter 13 bankruptcy cases is low. And if you fail, it might affect your ability to file again in the near future.

Read on to learn why filing for Chapter 13 bankruptcy without an attorney is almost always a bad idea. (To learn more about how Chapter 13 bankruptcy works, what happens to your debts and property, and more, see our Chapter 13 bankruptcy topic area.)

Do-It-Yourself Chapter 13 Bankruptcies Are Rarely Successful

Chapter 13 bankruptcy has always been more complex than Chapter 7 bankruptcy but in the last few years, it has become even more difficult. A recent study by the Bankruptcy Court for the Central District of California, a district with a very high number of pro se (or self-represented) bankruptcy filers, shows that Chapter 13 plans filed without an attorney are confirmed in less than 1% of the time, and this includes the cases prepared by non-lawyer petition preparers. Even seasoned attorneys often need to amend a plan more than once to get it confirmed and accomplish the client's goals.

What it Means to Represent Yourself

When you represent yourself, you are responsible for researching the law, following the bankruptcy court rules, preparing and filing all of your documents, and making all of the decisions in your case.

When you file for Chapter 13, a trustee is appointed but the trustee is not your lawyer. In fact, the trustee is prohibited from providing you with legal advice and is rarely, if ever, able to respond to calls or emails requesting help with your case. The Chapter 13 bankruptcy trustee will likely notify you if your plan is not in compliance with bankruptcy rules, law, or local procedure, but it will be up to you to correct the problem. Similarly, court employees can answer simple procedural questions but are also not allowed to provide legal advice.

Pitfalls When Representing Yourself in Chapter 13 Bankruptcy

When you file Chapter 13 without a lawyer, there are many pitfalls that could lead to the dismissal of your case. Common reasons for the dismissal of Chapter 13 cases where the debtor is self-represented include failing to:

  • file all of the schedules, statements, and local forms completely and on time
  • file a plan within the time allowed or file a confirmable plan
  • provide proper notice to creditors
  • include spousal or household income in the means test, where applicable, or including expenses which are not allowable
  • comply with local procedures
  • timely begin making plan payments
  • correct filing errors within the time allowed
  • appear at creditors meetings and hearings (which could last all day and/or be continued to add dates and times)
  • maintain insurance on vehicles and real property, and
  • file tax returns timely and provide copies to the trustee or file with the court, as may be necessary in your district.

Complying With Procedural Rules

Apart from the bankruptcy law, which you will need to learn and understand to successfully represent yourself in Chapter 13, you will also need to comply with certain procedural rules.

One of the most common stumbling blocks for self-represented parties in Chapter 13 is providing proper notice to creditors or other parties when papers have been filed or hearings are set. Figuring out who to notice and how and when that particular party must be notified is not easy because it can differ depending on the reason for the notice. Courts won't rule in your favor on matters that have not been properly noticed.

Complying With Local Requirements

There are almost always local rules, forms, guidelines, and procedures in Chapter 13 that vary widely between districts. And even different trustees in the same district may have different requirements.

Many trustees maintain their own website with information on their procedures and courts often maintain a website with local rules, guidelines, and information for pro se (self-represented) debtors. But putting all of this information together is very difficult and will require many trips back to these sites. Filing a Chapter 13 on your own can easily become a full-time job.

Representing Yourself in Court

If you filed Chapter 13 to take advantage of legal strategies such as lien stripping or cramdown, or to combine it with a mortgage modification, you will need to file the appropriate motions with the court and attend hearings. If a creditor objects, the matters could be set for an evidentiary hearing where you will need to present evidence and witness testimony.

While judges often have patience with pro se debtors, all parties, represented or not, have to comply with the rules of evidence. Even if you have a good legal position to win at the hearing, if you can't get your evidence before the court because your methods do not comply with the evidentiary rules, you'll lose.

The Consequences of Failure

If you are not successful, the court will dismiss your Chapter 13 case. If this happens, at best, you are back in the same spot you were before you filed. But you could also end up in a worse position: With the passing of time, additional interest and late charges will accrue and sometimes creditors are angry about the delay.

Even more important, if you want to get an attorney and file again, you may run into roadblocks because of your previous filing.

You might have to wait to file again. Courts often dismiss cases with prejudice for a period of time. This means you cannot file again during this time period unless you or your new lawyer is successful in getting the prejudice period shortened (usually to the time that has already gone by).

The automatic stay may be limited. But even then, you have another hurdle because the automatic stay that you rely on to stop collection actions while your bankruptcy is pending may be limited to 30 days or not available at all without filing motions and convincing the judge to continue or impose the stay. (To learn more, see Losing the Automatic Stay for Repeat Bankruptcy Filings.) Even if successful, all of this means much more work for your new lawyer and a higher fee.

To learn how to find a bankruptcy attorney, how much you can expect to pay, and more, see our Getting Bankruptcy Help topic area.

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