You don't always need an attorney when filing individual bankruptcy on your own or "pro se," the term for representing yourself. If the case is simple enough, you can file for bankruptcy without help. But most people benefit from representation. This article explains:
If you want to file pro se, at the very least, 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.
The general rule is the simpler your bankruptcy, the better your chances are of completing it on your own and receiving a bankruptcy discharge, the order erasing debt.
Your case is likely simple enough to handle without an attorney if:
However, even straightforward Chapter 7 cases require work. Plan on filling out extensive paperwork, gathering financial documentation, researching bankruptcy and exemption laws, and following local rules and procedures.
It is almost always a good idea to hire an attorney to represent you in bankruptcy. Here are two situations that always call for representation.
If you own a small business or have income above the median level of your state, a significant amount of assets, priority debts, nondischargeable debts, or creditors who can make claims against you based on fraud, you'll likely want a lawyer. Here's why.
Filers don't have an automatic right to dismiss a Chapter 7 case. If you make a mistake, the bankruptcy court could throw out your case or sell assets you thought you could keep. You could also face a bankruptcy lawsuit to determine whether a debt shouldn't be discharged. If you lose, you'll be stuck paying the debt after bankruptcy.
There are many good reasons for filing Chapter 13 bankruptcy instead of Chapter 7. You might want to file Chapter 13 to catch up on mortgage arrears so you can keep your house. Or you might want to get rid of your second mortgage, "cram down" or reduce a car loan, or pay back a debt that won't go away in bankruptcy over time, such as back taxes or support arrears.
Even if you're filing for Chapter 13 only because you make too much to qualify for Chapter 7, most Chapter 13 cases are too difficult to file on your own.
Many people realize the legal fees required to hire a bankruptcy lawyer are quite reasonable once they understand how they can benefit from a bankruptcy attorney's help.
In many cases, a bankruptcy lawyer can quickly identify issues you might not spot.
Avoiding paperwork pitfalls can be problematic even if you choose the correct chapter. Here are common issues bankruptcy lawyers can prevent.
Most Chapter 7 cases move along predictably. You file for bankruptcy, attend the 341 meeting of creditors, and get your discharge. But, not all bankruptcy cases proceed smoothly, and other, more complicated issues can arise.
For instance, many self-represented filers:
Failing to understand these concepts will be problematic if a creditor challenges the dischargeability of a debt or if the bankruptcy trustee, the official who oversees your case, or a creditor alleges you've committed fraud. Or something else might crop up.
The bottom line is that an attorney is essential when you find yourself on the receiving end of a motion or lawsuit.
If you decide to file for bankruptcy on your own, find out what services are available in your district for pro se filers.
Some bankruptcy courts hold pro se clinics where an attorney describes the bankruptcy options and process. Others can connect you with legal aid organizations that do the same. Many courts and their websites have information for consumers filing for bankruptcy, from brochures describing low-cost or free services to detailed information about bankruptcy.
Getting a good self-help book is also an excellent idea. Look for a bankruptcy book that highlights situations requiring an attorney.
Even if you have a simple Chapter 7 case, bankruptcy can be intimidating and time-consuming. You must accurately fill out many forms, research the law, and attend hearings.
If you understand bankruptcy law but would like help completing the forms (the average bankruptcy petition is approximately 50 pages long), you might consider hiring a bankruptcy petition preparer.
A bankruptcy petition preparer is any person or business, other than a lawyer or someone who works for a lawyer, that charges a fee to prepare bankruptcy documents. Under your direction and control, the bankruptcy petition preparer generates bankruptcy forms for you to file either by typing them or inputting information into a bankruptcy software program.
Because bankruptcy petition preparers are not attorneys, they can't provide legal advice or represent you in bankruptcy court. Specifically, they can't:
In essence, you must understand what debts your bankruptcy will discharge, what will happen to your property in the bankruptcy, and what laws exempt your property from being taken for the benefit of your creditors.
Also, you must file the bankruptcy papers and represent yourself in court. In other words, you are responsible for your case.
You act as your attorney and use the bankruptcy petition preparer as a typing service that transposes the information you give them onto the official forms.
A good bankruptcy petition preparer will have up-to-date computer software that will quickly and relatively easily generate the documents. And most bankruptcy petition preparers charge low fees, especially compared to lawyers.
Bankruptcy law requires bankruptcy petition preparers to follow these business practices:
People who help others for free are not subject to these rules.
An attorney will prepare the forms, attend the hearings, and guide you through the process, and again, most people find it well worth the cost. If you're struggling to find the money to pay for legal help, find out what to do when you can't afford to hire a bankruptcy lawyer.
Did you know Nolo has been making the law easy for over fifty years? It's true—and we want to make sure you find what you need. Below you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!
Our Editor's Picks for You
More Like This
Consider Before Filing for Bankruptcy
Helpful Bankruptcy Sites
We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.