Although anyone is permitted to file bankruptcy pro se, it’s usually a better idea to hire a lawyer experienced in bankruptcy issues to guide you through the process. Sure, that’s just my opinion and I’m not exactly unbiased. However, bankruptcy is a complicated area of law and there are a lot of traps for the unwary pro se debtor. Why should you hire a lawyer rather than try filing yourself? Here are my top five reasons:
1 – A bankruptcy lawyer can help protect your assets. Unless you are familiar with the exemption laws in your jurisdiction (Wisconsin allows debtors to choose between the federal exemptions and the Wisconsin state exemptions), you could put your assets at risk. If you fail to properly exempt your assets, the bankruptcy trustee could liquidate those unprotected assets to pay your creditors.
2 – A bankruptcy lawyer can help you determine which Chapter to file. For example, if your income is above median and you can’t pass through the means test, would it be better to try and rebut the presumption of abuse in a Chapter 7 or file a Chapter 13? If you have more equity in your home than you can exempt, would it be better to file a Chapter 7 and try to make a deal with the trustee to keep your home, or to file a Chapter 13 and pay that excess equity into the plan for 3-5 years? What kind of debts do you have? There are a lot of variables that go into making the 7 vs. 13 decision, and that decision is too important to make without competent counsel.
3 – Bankruptcy lawyers are extraordinarily good-looking, friendly, and fun people to be around. I don’t have a cite to back that up, but I think it’s probably true.
4 – A bankruptcy lawyer can help you decide when to file. If you have previously filed a bankruptcy, you may not be able to file again for a few months. If you’re not familiar with §727 and §1328 of the Bankruptcy Code, you may file your case even though you’re not eligible for a discharge. Timing issues are especially important if you are hoping to discharge tax debt. If you don’t know the rules and file just one week too soon, your tax debt may be nondischargeable.
5 – If anything goes wrong in your case and you need to hire a lawyer to fix things, it will likely cost you much more in legal fees. This is the same theory I use when explaining to my wife why I don’t do plumbing or electrical home repairs myself. It will cost more to have the professionals come in to fix my mistakes and then do it correctly than to just hire them in the first place.
Yes, you can file bankruptcy without a lawyer. You can also defend yourself against a murder charge without a lawyer, take out your own appendix without a doctor, or pull your own tooth without a dentist. No one will stop you from doing it, but you may not get the results you were hoping for.
Bankruptcy attorneys from around the country are taking part in this “Bankruptcy Alphabet” exercise. Please take a few minutes to check out these other blog posts on the letter “L.”
Levy – by Lakewood, Ca Bankruptcy Lawyer, Christine A. Wilton
Lie, the Big Mortgage Industry – by St. Clair Shores MI bankruptcy attorney, Kurt O’Keefe
Lien – by New York Bankruptcy Lawyer, Jay S. Fleischman
Lien Avoidance – by Pittsburgh Bankruptcy Attorney Shawn N. Wright
Lien Stripping – by Omaha/Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell
Lien Stripping – by Honolulu Bankruptcy Attorney Stuart T. Ing
Life After Bankruptcy – by San Francisco Bankruptcy Attorney, Jeena Cho
Life Insurance – by Cleveland Bankruptcy Lawyer, Bill Balena
Lift the Stay – by Marin County Bankruptcy Attorney, Catherine Eranthe
Limits of Bankruptcy – by Livonia Michigan Bankruptcy Lawyer, Peter Behrmann
Liquidated – by Metro Richmond Bankruptcy Attorney, Mitchell Goldstein
List It Or Lose It – by Allen Park, Michigan Bankruptcy Lawyer, Christopher McAvoy
Listing Assets and Debts – by Los Angeles Bankruptcy Attorney, Mark J. Markus
Long Term Payments – by Philadelphia Suburban Bankruptcy Lawyer, Chris Carr
Luxuries – by Colorado Springs Bankruptcy Attorney Bob Doig
Image Credit: Mr. Mystery/flickr