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Filing Bankruptcy Pro Se

When a debtor files a case without an attorney they think their case is simple and all they have to do is to fill out the forms to do it themselves and save the cost. The problem is, it isn’t simple. When the law changed in 2005 over half of the attorneys who filed bankruptcy cases quit because it became too complicated.

Every year someone thinks they know how to pilot the plane and hops into the seat without a license to fly. They may get down the runway. They may get the plane in the air. They may get it close to their destination. But the landing really hurts and makes a viral you tube video. Hardly a week goes by without a call from someone who didn’t use an experienced bankruptcy attorney wanting us to fix their case after it has been dismissed. You should realize a panel trustee in a Chapter 7 case is paid about 25% of any property he can take from you. Miss an exemption or miss listing a property and it may be sold. There is normally no leniency just because you acted without an attorney when the panel trustee gets 25% of anything he can take from you. The banks are also hiring experienced attorneys to stop you.

Often the debtor thought all they had to do was to fill out a form. It’s easy to think that, until it goes wrong. The United States Bankruptcy Court is a part of the federal district court. This means you are not in state court. In federal court you are expected to have the paperwork perfect. There are no excuses for filing incomplete or late schedules. You cant compete pro se against the banks attorney who is far more knowledgeable and experienced than you. You cant compete against the trustee who has spent a lifetime taking property from debtors who had an attorney. When you file a case by yourself your paperwork has to be just as good as paperwork prepared by an experienced attorney in federal court. This means you have to obey the local court rules and all of the federal and state rules and laws. When you act as your own attorney and file Pro Se there are no excuses for any errors. Make a mistake and the trustee takes away property or the bank wins.

Preparation for the Case

So what do you or an attorney have to know to properly prepare a case at the least. First you have to know the Bankruptcy code. My 2012 copy looks like it is over 1000 pages. Second you have to know the Bankruptcy Rules which is another complete volume. Then there are the rules that are not in the code like the Federal and State Exemptions, plus collection laws including the FDCPA rules, The Local Rules for that district, then each judge will have his or her own rules and how they want it prepared. The individual trustees and the US Trustee will also have their own individual ideas on how to do it. In other words it is more complicated than brain surgery.

File pro se and you are assumed to know and you are responsible for the results whether the rule is written or unwritten. Many things like which car lenders require a reaffirmation are only learned by experience. Some lawyers just graduated and they may be learning on you. If you file pro se, you are learning on yourself. If filing pro se sounds like motel room surgery it’s because it is like motel room surgery.

The results an experienced attorney gets is completely different than what a debtor gets pro se. In some districts the success ratio for Chapter 13 cases  is less than one percent in getting the discharge while the success ratio of getting a discharge in a Chapter 13 in that same district with an attorney is 55% and the success ratio of getting the discharge with a highly qualified experienced attorney is even higher. In Kentucky the success ratio of getting a Chapter 7 discharge with an attorney is over 90% in our office it is over 99%. But the ratio for pro se debtors in most states is around 60%. Considering you normally don’t have a second chance to file a second Chapter 13 case to save a home it is foolish to file such a case pro se. You may be able to dismiss a Chapter 13 but you cant dismiss your Chapter 7 without the approval of the Chapter 7 trustee. If a Chapter 7 Trustee now owns 25% of your home it isn’t going to happen. I am often called to try to fix it after someone has messed it up. Sometimes I can, and sometimes I can’t. The trouble and expense to correct a pro se or bad attorney problem is at least double the normal fee.

The attorney fees in our area have tripled since 2004 from 500 to about 1500. The work has more than tripled. It’s work you don’t want to do and what you gain by hiring an experienced attorney more than pays for the cost. Generally studies show more debt is discharged, more property is kept and budgets are reviewed and made more affordable by experienced and professional attorneys that have done thousands of cases. These attorneys make sure the budget is accurate and feasible while the inexperienced attorneys don’t know what the expenses are.