The Short Answer is Yes
The long answer? Legally, you’re allowed to file for bankruptcy without a lawyer. The term for this is “pro se,” and many of those who file for bankruptcy do it this way. But it’s not a path we recommend.
Filing for bankruptcy is complicated, has serious implications on your future finances, and you’re not always guaranteed to get all of your debts wiped clean.
Here are a few reasons you shouldn’t attempt it without the help of a qualified bankruptcy attorney.
Because Bankruptcy May Not Be Your Only Option
There are definite pros and cons to filing for bankruptcy, and for some people, it’s the best or only choice available. But you may not be aware of all your options.
An experienced bankruptcy lawyer can assess your situation and consult with you regarding alternatives to bankruptcy that you may not have considered.
Because You May Not Know Which Type of Bankruptcy You Need
There’s more than one way to go bankrupt. In fact, there are six different kinds of bankruptcy. The one that’s right for you depends on a lot of factors including the type of debt you have, your income and assets, and your goals.
A knowledgeable bankruptcy attorney can help you choose the type of bankruptcy that’s the right fit, and guide you through the process of filing.
The Three Most Common Types of Bankruptcy
Chapter 7: You can only file for Chapter 7 bankruptcy if you qualify financially. To qualify, your income should be below the median for a household of your size in your state. There is some elasticity in these calculations, but if the court decides you make enough disposable income to pay a reasonable amount of your debts, you may not be allowed to choose this option.
Under Chapter 7, a court-appointed trustee oversees the sale of anything you own that is not exempt from being taken and the proceeds are used to pay off your debts. But for most people, the most or all of their assets are exempt from being taken. Remaining debt is forgiven, mostly. Some types of debt, such as tax debt and student loans, cannot be discharged at all, or only in limited circumstances.
A lawyer can be of immense help if you are filing Chapter 7 bankruptcy. For instance, while you do have to sell assets off to pay your debts, an attorney can help you determine which assets are exempt from being taken and which aren’t. This will be important in trying to keep your car, your house, or your retirement fund.
Chapter 11: You don’t have to qualify to file for Chapter 11 bankruptcy. Both individuals and various kinds of companies can file, and you don’t have to meet a certain income requirement.
This is one of the more complicated types of bankruptcy, however, and it costs more to file than other types. That’s why it’s more commonly used by businesses – not to erase their debt entirely, but to restructure it while continuing to stay open.
If you own a business and are considering declaring bankruptcy, it doesn’t have to mean the end. In fact, many businesses that are still open today have Chapter 11 bankruptcies in their past, including Chrysler and General Motors.
If you’re considering this type of bankruptcy, an experienced bankruptcy lawyer can be invaluable in helping you navigate this complex process.
Chapter 13: Chapter 13 bankruptcy is generally for individuals who don’t qualify for Chapter 7 because of income issues or who are trying to protect assets which would be non exempt in a chapter 7.
Rather than having your debts wiped clean, it involves developing a plan to pay back some percentage of those debts within three to five years. Typically, you make the payments to a trustee, who then uses them to make monthly payments on your debts.
There are limits to how much debt you can pay off this way, and those limits change periodically. As of this writing, the limits stand at approximately $419,275 for unsecured and $1,257,850 in secured debt.
Because There Are Major Paperwork Pitfalls to Avoid
You’re technically permitted to fill out bankruptcy paperwork without the help of an attorney, but if you do, you enter a paperwork minefield. A few of the most common mistakes include:
Not filing some of the necessary documents. There’s a large federal form packet for filing bankruptcy, as well as local forms in many jurisdictions.
You may not be aware of all the forms you need and if you don’t file all of them, your case could be dismissed out of hand.
Failing to protect key property. You don’t necessarily have to lose your house, car, retirement account, treasured family heirlooms, or other important assets in a bankruptcy, but being awarded a property exemption often depends on how you fill out the paperwork.
Skipping the adult education part. Both Chapter 7 and Chapter 13 filers have to take credit counseling classes from an approved instructor before qualifying for debt relief.
Many people filing on their own don’t realize these requirements exist or don’t fully understand them and if you don’t file the right certificate of completion at the right time, you risk getting your case dismissed.
Because Not Every Bankruptcy Goes Smoothly
For instance, you don’t always get your debts immediately forgiven in Chapter 7 bankruptcy. Your debtors could contest your bankruptcy or object to your right to discharge what you owe them.
These Actions Could Cause Problems For You And Put Your Future Financial And Legal Situation At Risk, Both In The Short And Long Term. You’ll Need A Lawyer’s Help To Respond Appropriately.
Considering Bankruptcy? Get the Help of a Knowledgeable Attorney
At Speights Law, we’ve handled over 800 personal bankruptcies, both simple and complex. We can help you, too.
We’ll assess your situation, discuss your options with you, and champion your rights throughout the process. Get in touch at (770) 479-1500 today for a free, confidential consultation.
Archie Speights is a co-founder and lead criminal law attorney of Speights Law in Cherokee County. He is an experienced criminal defense lawyer who handles an assortment of major felony cases, including murder, sex crimes, aggravated assault, and drug crimes in the state of Georgia. To contact Archie, please visit our contact page.