If you want to file for Chapter 7 bankruptcy but don’t have much cash to pay an attorney, you can do so. There’s nothing in the law that prevents an individual from filing a pro se (without a lawyer) Chapter 7 case. Even so, you’ll have a greater chance of success if your matter isn’t overly complicated. And you’ll want to be willing to do your research so that you’re sure that you understand the pitfalls you could face if you make any errors.
What to Expect in Your Chapter 7 Case
Filing your own bankruptcy can be a daunting task. You’ll have to complete several steps to reach your goal of discharging (wiping out) your debt.
At a minimum, you must:
- take a credit counseling course before you file your case and a debtor education course afterward
- prepare and file the official bankruptcy forms (a petition, schedules, and other forms)
- supply the bankruptcy trustee (the official responsible for managing your case) with 521 documents, such as bank statements, paycheck stubs, and tax returns
- attend the 341 meeting of creditors to clarify any questions the trustee or a creditor might have about the information provided on your schedules, and
- turn over all nonexempt property (property not protected in bankruptcy) to the trustee.
A simple case with few creditors, little property, and no secured debt will be easier to complete on your own than a more complicated matter. Chances are, however, that something challenging will crop up, and if it does, you can’t count on the court or the trustee to help you work through the problem. The court will expect you to handle any issue just as an attorney would do (so you should count on putting in extra research time).
Here are a few common problems you might encounter:
- You make too much to qualify for a Chapter 7 case.
- You have a car loan or mortgage (you’ll have to decide whether to give back the property or enter into an agreement with the lender to pay for it, for instance, by signing a reaffirmation agreement or seeking redemption of the collateral).
- You own property that you can’t exempt.
- You’ve moved to from one state to another during the two years before you file (you’ll need to know which state’s exemption scheme to use).
- You owe income taxes, child support, alimony, student loans, or another type of debt that can’t be discharged.
- You’ve caused someone else injury.
- A creditor has accused you of committing fraud, such as charging up your credit cards knowing you’d file bankruptcy.
- You’ve transferred property to a third party within the previous two years (the trustee might try to get it back).
- You own a business.
Help for the Pro Se Filer
You’ll want to become familiar with your local bankruptcy court’s website. Not only do many courts have information just for pro se filers, but you’ll find other relevant information, such as local forms your court will require you to use. Here’s the website for the bankruptcy court in the Northern District of Texas. You can use the federal court locator to find your court.
Here are other resources you might find helpful:
- Free bankruptcy consultation. You can learn much by visiting with a consumer bankruptcy attorney and most offer a free consultation. You’ll likely be able to tell your story and get a preliminary analysis of your particular issues. The attorney will be happy to discuss payment options. You might be surprised with the value you’ll receive from hiring an attorney compared with the consequences you’ll face if something goes wrong filing on your own.
- Unbundled legal services. In some districts, instead of hiring an attorney to represent you for the entire case, you can take advantage of what is known as “unbundled” legal services. You can contract with the attorney to work with you on particular parts of the case rather than the entire matter. For instance, you might want to hire an attorney to help you gather the paperwork needed, then represent yourself at the 341 meeting of creditors and negotiate your own reaffirmation agreement.
- Bankruptcy petition preparers. You’ll find people called bankruptcy petition preparers know what schedules and other papers to prepare for a case, and what information is necessary to complete the paperwork. They’ll charge you significantly less than what you’d pay in attorneys’ fees, but they can’t give legal advice or represent you in court.
Hiring an Attorney If Something Goes Wrong
If you run into difficulty any step of the way, you can still hire a bankruptcy attorney to step in. On the downside, most lawyers joining a case in the middle will likely charge you a full fee, reasoning that repairing a case takes at least as much work as doing it right in the first place.
Questions for Your Attorney
- How much is your fee to file a Chapter 7 bankruptcy?
- Do you offer a payment plan?
- Do you see any issues that might jeopardize my bankruptcy?