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Q.Do I need an Attorney to file for bankruptcy?
A.No, but the more assets your have the more you have to lose in a botched bankruptcy petition.
Federal law permits a bankruptcy petitioner to file "pro se" (without an attorney), but proceed with caution because the bankruptcy code is very complex and individuals who represent themselves are held to the same standard as attorneys. While you may try to do it yourself, its important to know the various filing requirements, all of the exemption choices, and any available adversary possibilities.
A few forms that a bankruptcy petitioner will need to complete if filing pro se include: the Bankruptcy Petition, which varies depending on the type of bankruptcy being filed; and the "Statement of Financial Affairs." This Statement requires: (a) detailed information about the petitioner's background and financial history for the past two years, (b) a complete listing of the petitioner’s assets and liabilities, and (c) statements concerning the petitioner's then present financial condition.
A bankruptcy petitioner who files pro se will also have to decide which debts s/he may be exempt from repaying, under the terms of the Bankruptcy Code.
The most common mistakes made by "pro se" petitioners who often use the services of a paralegal include:
- The failure to properly select the appropriate Exemptions to preserve assets
- The failure to list Property in the schedules in the Statement of Financial Affairs attached to the Bankruptcy Petition, such as stocks, partnership interests, lawsuits, tax refunds, recently transferred property, and assets the bankruptcy petitioner thinks “no one will know about” etc…
- The failure to list ALL Creditors, either because the bankruptcy petitioner wants to repay a particular creditor, or because the debtor simply forgot to list a a creditor
- Underestimating and Overestimating living expenses in the attached Schedules to the "Statement of Financial Affairs either to: (1) “trick” the Court into believing that the bankruptcy petitioner has no money, or (2) suggest that the bankruptcy petitioner can’t pay his other debts because his or her living expenses are too high. The first is usually very apparent to the Court and the later often leads the Court to find that the Bankruptcy Petitioner has sufficient money to fund a Chapter 13 Bankruptcy Plan.
Because of the complexity, it is a good idea to seek professional legal advice, especially if you own a home or a vehicle that is not leased or financed. An attorney can review your financial situation, determine which type of bankruptcy is right for you, and help you understand your options under both federal and state law.
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