Pitfalls of Filing for Chapter 7 Bankruptcy Without an Attorney

Many people file for Chapter 7 bankruptcy without an attorney. In fact, in some districts, a whopping 28% of bankruptcy filings were by pro se litigants (the legal term for “filing on your own”).

Some people represent themselves because they can’t afford the attorney fees. Others have simple cases and don’t feel the need to hire an attorney. But while doing so is possible, it’s not wise in every case. In this article, you’ll learn about some of the most common problems the court sees in bankruptcy cases filed without an attorney.

Prebankruptcy Considerations

In many cases, problems arise even before the consumer files for bankruptcy.

• Not needing to file. Some people file for bankruptcy because they don’t understand what bankruptcy can and cannot do, and what their alternatives are. For instance, the filer might hope it will help them wipe out debts that don’t go away in bankruptcy. If you’d like to start educating yourself, see the articles in Bankruptcy Basics and Bankruptcy: Should I File?
• Filing the wrong chapter type. For most consumers, the logical choices are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Each type has specific benefits that solve particular problems. Also, property is treated very differently in each chapter. For example, if you want to save your home from foreclosure, Chapter 13 might be your best bet. If you have low income and no assets, Chapter 7 may be the way to go. If you file for the wrong chapter, you might lose valuable property, or end up not discharging (wiping out) certain debts

Filling Out Bankruptcy Paperwork

Even if the debtor chooses the correct chapter, pitfalls abound in the paperwork phase of bankruptcy.

• Failing to file required documents. Bankruptcy is form-driven. You’ll have to complete a lengthy federal packet, and, in some cases, your court will have local forms, as well. Many self-represented bankruptcy debtors don’t file all of the required bankruptcy documents, which, if not remedied, will result in a dismissal of the case. You can find information on the forms you’ll need, filing fees, and more in our Filing for Bankruptcy: Getting Started section.
• Failing to protect property. You don’t lose everything in bankruptcy. Property exemptions play a vital role in protecting property in both Chapter 7 and Chapter 13 bankruptcy. But, many pro se filers don’t list the proper exemption to keep an item of property, and, as a result, risk losing it. If you stand to lose valuable property (like your home or car) or property you care about (like a family heirloom), a visit to an attorney might be well worth the money.
• Failing to take required education courses. In Chapter 7 and Chapter 13 bankruptcy filers must receive credit counseling from an approved provider before filing for bankruptcy, and complete a financial management course before getting a discharge. Many pro se debtors, confused about these requirements, fail to file the proper certificate, which can result in a dismissal of the case.

Motions or Adversary Actions

Most Chapter 7 cases move along predictably: you file for bankruptcy, attend the 341 meeting of creditors, and then get your discharge. But, that’s not always the case. Other, more complicated issues can arise that most pro se filers aren’t prepared to handle. For instance, many self-represented filers:

• don’t understand the significance of motions for adversary actions
• can’t adequately defend against an action seeking to deny discharge, and
• sometimes file illegible or handwritten motions or responses.

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—alleges that you’ve committed fraud. Or something else might crop up. When you find yourself on the receiving end of a complaint or motion, an attorney is essential to your success.

How to Get Help With Your Bankruptcy

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. Any bankruptcy book worth its salt will highlight situations when you should talk to an attorney.

You also might be able to find an attorney who will provide advice without full representation. And most bankruptcy attorneys will meet with you for free for an initial consultation. That might be enough for you to learn that bankruptcy is not for you, to determine which chapter is best for you, or to discover that you have some issues that might mean going it alone is a bad idea.

(To learn more about hiring an attorney, getting other types of bankruptcy help, or what to do if you can't afford a Chapter 7 attorney, visit out Getting Bankruptcy Help section.)