As with any legal proceeding, individuals have the right to represent themselves in a bankruptcy filing without hiring an attorney. Filing on your own and representing yourself – known as “pro se” – is possible if the case is straightforward enough.
Let’s start by looking at those circumstances when your bankruptcy may be simple enough to receive a bankruptcy order on your own.
* You pass the first portion of the Chapter 7 means test
* You can easily protect your assets with exemptions
* You don’t have any non-dischargeable, priority debts
* You are not being accused of fraud by your creditors
The Bankruptcy Process in 5 Steps
Even the most uncomplicated Chapter 7 filing requires extensive paperwork, financial documentation, knowledge of bankruptcy and exemption laws, and adhesion to local rules. These are the basic steps to filing bankruptcy:
1. Calculate Your Income Against the Means Test: The first step is to perform a “means test” to determine eligibility for Chapter 7 bankruptcy. You’ll have to answer questions regarding monthly income, debts and non-exempt assets, and the number of people in your household.
2. Assess the Credit Situation: Next, obtain credit reports from all three credit bureaus, as creditors don’t report to every bureau, and every debt needs to be reported for discharge. The filer will then be required to complete a credit counseling and financial literacy course.
3. Fill Out the Paperwork: Completing official bankruptcy forms is typically the most complicated and time-consuming part of filing bankruptcy without an attorney. Once forms are completed, relevant documents are attached and sent to the bankruptcy trustee. Any mistakes or omissions in the paperwork can cause the case to be dismissed.
4. Attend the Meeting of Creditors: Filers must attend the “Meeting of Creditors” on the scheduled date. The creditors aren’t typically present, but the trustee will ask standard questions that the filing party must answer truthfully and accurately.
5. Attend a Personal Financial Management Course: Filers must complete a post-filing Personal Financial Management Instruction Course. Thie must take place within 45 days of the meeting of creditors. After the course completion, the bankruptcy court will notify the filer whether the debts have been discharged.
When Shouldn’t You File Bankruptcy Without Representation?
While it is legally possible to file bankruptcy on your own, most people find that hiring professional representation is a significant benefit. If filers own a business, do not qualify for the means test, have priority debts, or have creditors claiming fraud, hiring an attorney is prudent. If the individual makes a mistake, they risk having their assets sold or having their case thrown out.
* When individuals own a business, the assets can be mixed up. You’ll want to ensure that a personal filing does not cause the company to suffer or that a business filing can affect your personal belongings.
* Priority debts are non-dischargeable and don’t disappear in a bankruptcy filing. They also are paid first from the proceeds of sold assets. Priority debts include child support, spousal support, or another domestic support obligation; fines, penalties, and restitution imposed as punishment for violating the law; some taxes; debts from a DUI; retirement plan loans; money borrowed to pay off non-dischargeable tax debt and debts designated non-dischargeable in a previous bankruptcy.
Other Situations That Require an Attorney
These are some other situations that should inspire a call to a bankruptcy attorney. Be sure to hire a professional if the filing party:
- is guilty of fraud
- charged a luxury item within 90 days of filing
- intentionally harmed someone
- intentionally damaged someone’s property
- embezzled or stole money
- has non-dischargeable debts
- suspects a creditor might file a lawsuit against them
So although an attorney is not required to file bankruptcy, hiring one might be the smartest move an individual can make.
The law offices of Richard V. Ellis have helped hundreds of Sarasota area residents to overcome their financial issues and get back on the road to financial freedom. Don’t go it alone – call today to learn more about your options.