The Dangers of Filing for Bankruptcy Pro Se

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When someone is facing the possibility of bankruptcy, he or she is arguably already with limited financial resources. It is for this reason that many individuals filing for bankruptcy decide to file without the assistance of an attorney, also known as filing bankruptcy pro se. While filing pro se is a last resort option, it is not always in the best interest of the filer. In fact, there are many risks associated with filing for Chapter 7 or Chapter 13 bankruptcy without an attorney.

When I attend a client’s Section 341 Meeting of Creditors, I always see people that come in without a lawyer. Without fail, I can almost see the trustee’s mouth start watering like they just saw a tasty steak walking in. The trustee’s job is to “LIQUIDATE” assets to pay back your creditors so they are going to look under every rock to find things. When you do not have a lawyer, you are at their mercy. They know exactly what to ask and how to trip them up. Remember the old Lincoln adage, “he or she who represents himself has a fool for a client.” It certainly holds true in Federal Bankruptcy Court. I always see the pain and regret on a Pro Se filer’s face when they are told to come back in 2 weeks for further examination. In my head, I am saying why didn’t they just hire me?! I charge lower than everyone else!

Going in and filing without a lawyer is like jumping into Great White Shark-infested waters without a shark diving cage. It is a major mistake.

The Importance of Meeting with an Attorney Pre-Bankruptcy

Making the decision to file or not to file bankruptcy can be a tough choice making. Not every person is ready to file for bankruptcy. Meeting with an experienced bankruptcy attorney can help determine whether you qualify for bankruptcy and what type of bankruptcy is right for your situation.

  • Is bankruptcy necessary? A bankruptcy attorney can discuss additional options, including paying off certain debts before filing for bankruptcy, waiting until a tax return is received to go ahead and file, or not filing at all. An attorney will be able to educate the individual on what types of debts will be wiped out in a bankruptcy, how much debt can be eliminated in bankruptcy, and protect important assets- for example, your home, car, and retirement funds. Determining the right time to file is JUST AS IMPORTANT.
  • Choosing the Right Type of Bankruptcy: More than one type of bankruptcy filing exists, but not all individuals considering bankruptcy are aware of the differences between the types. If the filer wants to keep his or her home from foreclosure, the attorney may advise him or her to choose a Chapter 13 bankruptcy. If he or she has more unsecured debt, such as credit card or medical bills, the attorney may be able to direct the client towards a Chapter 7 filing. A free consultation with a bankruptcy attorney can be what is needed to make these important determinations that may not have been considered had the filer been going the pro se route.

Completing the Paperwork

After the type of bankruptcy is determined, the next step is filing the paperwork. While, yes, most bankruptcy documents are form-based, this does not mean that they are easy to complete. The changes enacted in 2005 to Federal bankruptcy law added some complicated requirements to the field of bankruptcy.

The consequences of making an error can mean the case is delayed or even thrown out after the filing is made. The following simple mistakes can be detrimental to a filer’s case but can be easy to do when handling the matter pro se:

  • Not filing the Required Forms: Bankruptcy filings require the individual to complete a set of lengthy federal forms, as well as local ones that may be required by the specific court. Many pro se filers fail to file all of the required forms, and this can result in the court dismissing the case if the proper forms are not filed timely.
  • Understanding Exemptions: Many bankruptcy filers go under the misconception that they will lose most or all of their property once the bankruptcy is filed. However, states and the federal government offer property exemptions to protect property in all forms of bankruptcy. Florida has one of the most generous homestead exemptions in the country. It depends on the state where the filing is being made as to which set of exemptions apply, but many filers have no idea what these exemptions are. As a result, they do not list the proper exemption to keep certain items of property, and they end up losing something they could have protected had they had an experienced bankruptcy attorney handling their case.
  • Not Taking the Required Courses: In addition to the court paperwork and process, in both Chapter 7 and Chapter 13 filings, individuals must receive credit counseling from an approved provider, as well as complete a financial management course, before receiving the official discharge. Many pro se filers are not aware of these requirements, which can result in the case being dismissed if they fail to file the proper certificates of completion.

Handling Contested Motions

One aspect in any bankruptcy case that can prove troublesome for pro se filers is when creditors file any objections or motions to contest either the automatic stay that is issued in a bankruptcy proceeding or in the discharge. When an adversarial motion is filed, the creditor is almost always represented by legal counsel. When that creditor’s attorney is up against an unrepresented filer who has no knowledge of the law or rules of procedure, the bankruptcy filer can be at a particularly unfair advantage. Any time an adversarial proceeding happens in a legal matter, it is always a good idea to hire an attorney for representation. The consequences of not being properly prepared and having the right defense can be extremely detrimental to the success of the bankruptcy case.

In addition, the court is not allowed to give special or preferential treatment to an individual simply because he or she is unrepresented. This means the individual filing pro se needs to know what he or she is doing and understand legal arguments as they come. It can be a near-impossible feat to do for someone without a legal background.

Increased Oversight by the Court

The filer will be working mainly with the bankruptcy trustee, and when an individual is filing a matter unrepresented, it should be expected that the trustee will take a special interest in the case to make sure everything is listed properly. The trustee may come back to the filer and ask for additional documents or financial information, and the meeting of creditors may take longer than it would for someone who is represented by an attorney. That extra oversight can be stressful for any individual, but it is necessary because the court is charged with ensuring that everything is complete and 100 percent accurate. Having an attorney by your side can be a huge lifesaver and something that is well worth the investment in the long run, to ensure that everything goes smoothly with little to no roadblocks along the way.

If you have any questions on this topic or are struggling with insurmountable debt, call Orlando bankruptcy attorney, Walter Benenati at 407-777-7777. Ask Walter how you can restart your life. At The Benenati Law Firm, we have helped thousands of individuals and families eliminate their debt and get a fresh start financially. The day you hire our firm, we will contact your creditors to stop the harassment and collection calls. We make our hours convenient for our clients and offer free consultations on Saturdays (9:00 a.m. – 3:00 p.m.) and throughout the week until 5:00 p.m. If you are in a financial crisis and considering filing for bankruptcy, contact an experienced Orlando bankruptcy attorney who can advise you of all of your options.

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