You are not required to have an attorney to file for bankruptcy. In some simple Chapter 7 cases, you can file on your own (it's called filing "pro se," meaning that you represent yourself) if you are willing to put in some time and research. However, in many cases, it's a good idea to have a bankruptcy attorney.
The importance of an attorney depends on the complexity of your case and whether you are filing a Chapter 7 or Chapter 13 bankruptcy. Read on to learn more about when it is feasible to file bankruptcy without an attorney and when you should strongly consider hiring one.
The general rule is the simpler your bankruptcy, the better your chances are to complete it and receive a discharge on your own. So it’s usually more feasible to file without an attorney if you are filing a simple Chapter 7 bankruptcy.
If your household income is less than the state median, you own little or no assets, and you don’t have any priority debts or creditors alleging fraud against you, then your case is likely simple enough for you to handle without an attorney.
What Is a Priority Debt?
Bankruptcy is an excellent tool that helps many people overwhelmed with debt get back on their feet. But it might not discharge (get rid of) everything that you owe. Priority debts get paid first if money is available to pay creditors. More importantly, they’re nondischargeable—they don’t go away in bankruptcy. (For an overview, see What Is the Difference Between Dischargeable and Nondischargeable Debts in Bankruptcy?)
Debts that you’ll remain responsible for include (many, but not all of these debts are priority in nature):
- child support, spousal support, or another domestic support obligation
- fines, penalties, and restitution imposed as punishment for violating the law
- some taxes
- intoxicated driving debts
- homeowners’ association dues assessed after filing for bankruptcy
- retirement plan loans
- money borrowed to pay off nondischargeable tax debt (for instance, the credit card debt incurred after using your account to pay a tax bill), and
- debts determined nondischargeable in a previous bankruptcy.
A student loan won’t get wiped out either unless you can prove to the court that it would be a hardship to make you pay it. Most people are unable to meet the standard, however. It can be costly to file and litigate the lawsuit necessary to prove the case, as well.
Additionally, any creditor can file a nondischargeability complaint asking the court to determine that a debt shouldn’t be discharged in your case. To win, the creditor will need to prove that one of a variety of situations exists.
- You committed fraud (for instance, you wrote a bad check or lied about your income on a credit application).
- You charged a luxury item less than 90 days before you filed for bankruptcy.
- You intentionally harmed someone or damaged their property.
- You embezzled funds or stole money.
- You failed to list all creditors in your bankruptcy petition.
If you suspect that you might have nondischargeable debts, or that a creditor might file a lawsuit against you, it’s probably not a good idea to represent yourself. Instead, consider speaking with a bankruptcy attorney. The lawyer can consult with you about the status of your debt and whether proceeding forward is in your best interests.
However, keep in mind that even the simplest Chapter 7 requires you to fill out extensive paperwork, gather financial documentation, research bankruptcy and exemption laws, and follow the local rules and procedures. At the very least, if you want to file pro se, use a good self-help bankruptcy book like Nolo's How to File for Chapter 7 Bankruptcy, By Attorney Cara O’Neill and Albin Renauer, J.D.
In certain situations, it is almost always a good idea to hire an attorney to represent you in bankruptcy.
There are many reasons to file a Chapter 13 bankruptcy instead of a Chapter 7 bankruptcy. You may want to file a Chapter 13 bankruptcy because you wish to catch up on mortgage arrears, get rid of your second mortgage, cram down (reduce) your car loans, or pay back nondischargeable priority debts, such as back taxes or support arrears. Or maybe you make too much money to qualify for a Chapter 7 bankruptcy. No matter what your reason is, most Chapter 13 cases are too difficult to file on your own.
Chapter 13 bankruptcies are a lot more complicated than Chapter 7s. In addition to filling out the official bankruptcy forms (and perhaps some local forms), you must also design a proposed repayment plan, something that is very difficult to do without the expensive software that most attorneys use. Also, certain actions such as stripping your second mortgage or cramming down a car loan will usually require filing additional bankruptcy motions and paperwork with the court.
As a result, even some attorneys will limit their bankruptcy practice to Chapter 7 cases because they feel they are not qualified to handle a Chapter 13. In fact, an overwhelming majority of Chapter 13 cases filed without an attorney get dismissed by the court. So if you are planning to file a Chapter 13, it is a good idea to hire a qualified attorney.
Certain Chapter 7 cases are more complicated than others. Your Chapter 7 will usually be more complex if you own a business, have income above the median level of your state, have a significant amount of assets, or have creditors who can make claims against you based on fraud. If any of the above applies to you, you risk having your case dismissed, your assets being taken and sold, or facing a lawsuit in your bankruptcy to determine that certain debts should not be discharged. In that case, it is advisable to hire an attorney to handle your bankruptcy.
Even if you have a simple Chapter 7 case, bankruptcy can be an intimidating and time-consuming process. You will need to accurately fill out many forms, research the law, and attend hearings. If you are not comfortable with any aspect of the bankruptcy process, you should consider hiring an attorney who will prepare the forms, attend the hearings with you, and guide you through the process.
To learn more about finding and using a bankruptcy attorney, see Bankruptcy Help: Lawyers and Petition Preparers.