Suppose you have lost your job as a result of uncertain economic circumstances and fallen behind on your mortgage or car payment. You may be experiencing difficult garnishment circumstances or being harassed by creditors. You may feel the need to file for bankruptcy but not have the money. Since you have been facing a financial crisis and looking for options to file bankruptcy, you might be thinking, can I file for bankruptcy without an attorney? Yes, you can file for bankruptcy without an attorney. Most of this article will show you how to file without a lawyer. But should you file a bankruptcy pro se? Probably not. Why?
The Bankruptcy Process is Too Complicated with Extensive Paperwork
The average Chapter 7 petition is 60-80 pages. In 2005 when the law changed, half the bankruptcy attorneys quit because it became too difficult. Make a mistake in this area of the law, and you lose a car or home. The Trustee keeps about 25% of anything he can take from you. Trustees would also like to switch you from a Chapter 7 bankruptcy to a Chapter 13 if it can be done. Make any of these mistakes, and it will cost you far more than the attorney fees and increase your chances of having the case dismissed.
Preparing the Petition and Filing the Schedules is Only the Start
You may save the lawyer fees, but now you have to do the work the attorney knows how to do and has spent 30 to 35 years learning. You cannot match the training and ability of a bankruptcy attorney who has prepared thousands of cases.
Now and then, I will have a client who claims he knows more than I do about foreclosures or Chapter 7. He doesn’t. He often comes back asking if I can fix it. Usually, it can’t be fixed, especially the day after the home is sold.
Filing is Hard Enough with a Bankruptcy Attorney
You will get no help from the federal court or trustee if a creditor challenges your filing. You are expected to know bankruptcy laws, the local rules, and bankruptcy forms. However, you can apply and get the filing fee waived if you are very poor.
But you are better off working a little overtime and saving up for a bankruptcy lawyer. Having said this, here is how it is done.
How to File Bankruptcy Without an Attorney?
The bankruptcy forms to file for bankruptcy can be downloaded from the court website. There is both your local court and the national website. In 2022 the court fees were 338. Financial management classes and credit counseling run from 20 to 40 dollars, but these fees can be waived for poor clients.
Bankruptcy attorneys use software to prepare the petition quickly and submit it via the internet 24 hours a day, seven days a week. If you file bankruptcy without an attorney, you will have to fill out the forms on paper and file them at the local office.
The clerk will take a printed petition but typically does not take cash for the filing fee and will only take certified funds. The clerk does not provide legal advice when you file for bankruptcy.
File Bankruptcy Pro Se But At Least Get a Free Consultation
Many attorneys evaluate a case for free. The attorney-client relationship is confidential, and any sensitive or confidential information is necessarily secure. But legal representation beyond having a lawyer talk about legal issues will typically cost money.
Usually, a bankruptcy attorney’s fees start at 250 per hour, and in 2022 most attorneys’ fees for filing a case were about 1400 for a single filer.
If you are doing this because you are poor and cannot afford the filing fees, you can ask for a fee waiver, and the bankruptcy form for this should be on your local bankruptcy court’s website in the local forms section.
Filling out the forms will take time and attention to detail, but if you have no income or assets and lots of time, it is possible with little risk of losing something you don’t have.
Qualifying for Chapter 7 Debt Relief
People rarely lose property in a Chapter 7 bankruptcy, but that is because their bankruptcy lawyer checks their list of assets and makes sure the exemptions are more than the property they own. You will have to do the same. These exemptions increase over time, and the income for the means test also increases with inflation.
If you are single and make less than 50,000, you usually will not have to file the means test schedule, which is the most challenging. If you make over the average income, reconsider whether you want to do this without an attorney. Even a qualified attorney or CPA could have problems preparing a means test without the software a bankruptcy lawyer uses.
The Bankruptcy petition is primarily an accounting cash flow statement (budget), balance sheet (statement of assets and liabilities), and 26 questions about your financial affairs. The bankruptcy court and bankruptcy trustee will review these to determine whether you qualify for a Chapter 7 bankruptcy.
If you make an error, it may cause you to lose an asset, or you may not be able to discharge a debt. Even worse, repeat filers may become barred from filing bankruptcy. Accuracy and attention to detail are the keys.
The Skeleton Petition
In an emergency, bankruptcy lawyers can file a short skeleton petition. This is often done to stop foreclosures. A homeowner may have worked hours before the sale on a mortgage modification that was never completed.
Bankruptcy law allows you to file a skeleton petition, but the remaining schedules must be filed shortly after. All that is needed is the voluntary petition form and the matrix. If you are filing to stop a foreclosure, be sure to advise the commissioner the bankruptcy has been filed.
You are too late if you file bankruptcy one minute after the foreclosure sale in Kentucky. The property then belongs under Kentucky law to the winning bidder. The only right you have left is the right of redemption.
Filing in an emergency does not excuse a debtor from doing the requirements. If a skeleton petition is done without doing the credit counseling, the case will be automatically dismissed. The bankruptcy law is strict; if a debtor wants debt relief, you must comply with a petition’s essentials.
You can gather the documents after you file bankruptcy, but law firms often refuse to file skeleton petitions or petitions without the required financial documentation. Filing a skeleton petition is risky and unprofessional. Many offices will refuse to do it because you should take time to make certain the petition is right.
These skeleton petitions can also backfire. If you don’t file it on time, you can file too early or too late, and the home may still be foreclosed. File in “bad faith”, and you can become locked out of being allowed to file bankruptcy.
The Bankruptcy Forms are Filed in this General Order
- Voluntary Petition
- Credit Counselling Certification
- Notice to debtors of options 342(b)
- Statement of financial affairs
- Statement of intention for Chapter 7 bankruptcy
- Schedules A-J
- Summary of Assets and Liabilities
- Declaration about an Individual schedules
- Statement of Current monthly income
- Means test (If your income is higher than average).
- Verification of the Creditor Matrix and CreditorMatrix
- Statement of Social Security number.
- Chapter 13 plan and certification if the case is a Chapter 13.
Preparing the Schedules for a Personal Bankruptcy
The federal bankruptcy code has several traps. If you have filed for bankruptcy within the prior year, you must file a motion to extend the stay. If you have filed twice, no stay will stop a foreclosure.
Bankruptcy lawyers will often file motions to strip a judicial lien if there is one. You must be on the deed if you need to use both exemptions to keep a home. Adding a spouse to the deed just before you file bankruptcy does not work. Gifts to family members or others are fraudulent transfers that may need to be undone. Sometimes it can not be undone.
You must list all your debts even though you want to keep the home and car loan, or you don’t want the ex to know.
Keeping Property When You File for Bankruptcy Without Legal Help
You are allowed to keep a certain amount of equity and property to start over with. You are not allowed to keep 25,000 in a bank account in Kentucky. An exemptions page on our website shows what you can keep in property in bankruptcy.
The federal exemptions increase with inflation and include tools, furniture, cars, homes, jewelry, and your favorite deer rifle. (This is Kentucky).
Kentucky uses federal exemptions. Most states use federal exemptions, but a few states like Indiana, Florida, and Texas may have state exemptions codes that allow much higher values. In 2022 you can keep 4,000 in equity in a car. Equity is the value of an asset like an auto minus the car loan for the auto.
You get to use the trade-in value for a car or the PVA value (taxed value) for a home generally in your bankruptcy filing. Bankruptcy attorneys will never use the Zillow value, which is often 20 to 40% more than a home’s actual value. The Trustee should be interested in the value he would get in foreclosure or a quick sale.
Bankruptcy Courts and Your Budget
Your household income and budget are everything. If you don’t have enough money over the reasonable and necessary expenses in your budget, you will not be able to reaffirm or perhaps keep the property. If you have too much disposable income left over, you will be required to file as Chapter 13.
A bankruptcy lawyer helps you plan your budget to qualify as a Chapter 7. At least he should. The bankruptcy petition must show you can afford the home mortgage and car payment. But little or nothing is left over for a Chapter 13 payment plan.
Anyone can file for bankruptcy. But without a bit of planning, you may not get what you wanted, or you may not get the bankruptcy discharge.
Consumer Bankruptcy Cases and Legal Aid or Pro Bono Help
Legal aid typically works under a heavy load and cannot take every case. But they may be able to steer you to an office that will offer legal assistance or work pro bono. Covid, however, had a bankruptcy impact on consumer bankruptcy lawyers. Few people needed bankruptcy relief during covid, and many consumer bankruptcy offices were downsized or closed.
Filing a bankruptcy petition will use about 8 to 10 hours of paralegal and lawyer time for a law firm. If you file for bankruptcy without a bankruptcy attorney, a bankruptcy judge will still require you to have the same quality in your petition.
In California, over 90% of the Chapter 13 cases filed pro se end up being dismissed. It can be done but not without spending time and attention to detail. A copy of another successful petition consumer petition from a good law firm will help you fill out the forms.
Make Sure All the Debts are Discharged in Your Chapter 7 Bankruptcy Case
Some of your debts will probably not be discharged. If you file bankruptcy on income taxes too early, the taxes will not be discharged.
If you want to bankrupt student loans, you will either have to prove they are an undue hardship to you or your dependents, or you will have to prove the loan does not qualify for protection under the bankruptcy code.
Debts due to fraud or intentional injury are not discharged. Child Support and Alimony are also not discharged. But you can manage and repay these debts in bankruptcy.
The Tricks and Traps of Chapter 7 Individual Bankruptcy Case
The case is dismissed if a bankruptcy lawyer files a case without credit counseling certification. If the case closes and the debtor forgets to file the financial management or debtor education certificate, the case closes without a discharge.
You may file without your spouse knowing, but the court uses household income to determine whether you qualify for a Chapter 7.
Just because you have to include a spouse’s income does not mean you get to use his expenses in your budget. Getting a fresh start means you get to include your expenses. Expenses that are not reasonable or necessary are not included.
Filing for bankruptcy requires that the petition is accurate and complete. Secured debts listed in Schedule d should list the year, make, model, mileage, and condition of the car. Car loans will often ask you to reaffirm, which means you will continue to owe the debt.
Credit Bureaus, a Fresh Start, Bank Attorneys Fees, and Typical Fees
If you want to keep the car, be sure to maintain full coverage insurance and make payments on time after filing for bankruptcy. Only a Chapter 13 can force creditors to allow you to keep a home or car.
Many lenders will require you to pay small attorney fees for the reaffirmation, which is put back into the loan. You are generally not forced to sign a reaffirmation, but your on-time payments will not be reported if you don’t.
Your mortgage payment can vary due to insurance and taxes. Bankruptcy will discharge a debt to a landlord, but it does not stop an eviction unless you deposit the overdue payments with the court.
Call My Office for a Free Consultation!
Even if you plan to file for bankruptcy without an attorney, you must consult a bankruptcy attorney to know your options. Call our office if you need an experienced bankruptcy attorney.
In my law firm, I meet everyone to build a healthy attorney-client relationship, and I intend to give the best services to prepare your petition.
Resources for Bankruptcy
If you are considering bankruptcy, don’t delay because timing is crucial. I am here to help you. So, contact my office immediately to start the conversation—Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905.