by: Baran Bulkat, Attorney
To file a successful bankruptcy without an attorney, you must be willing to put in the time and effort required to learn the necessary laws and procedures involved. But even if you do your research, it’s easy to make a mistake during the bankruptcy filing process. Below, we discuss some of the most common mistakes pro se (self-represented) debtors make when filing for bankruptcy. (Learn more about whether you might be able to file for bankruptcy without an attorney.)
Bankruptcy is not the solution to every debtor’s financial problems. There are certain types of debt that can’t be eliminated by filing for bankruptcy (these are called nondischargeable debts). In addition, if you have a significant amount of property, filing a Chapter 7 case can put your assets at risk if you can’t exempt them (discussed below). (Learn more about whether bankruptcy is in your best interest.)
For most debtors, whether it makes sense to file for bankruptcy will depend on:
Most individual debtors file for either Chapter 7 or Chapter 13 bankruptcy. But each type of bankruptcy has its own benefits and drawbacks. In general, which type of bankruptcy you should file will depend on your individual circumstances. Before filing your case, make sure to research the pros and cons of filing for Chapter 7 and Chapter 13 bankruptcy to determine the best choice for you. (Learn about whether you should file for Chapter 7 or Chapter 13 bankruptcy.)
If you want to file for bankruptcy and receive a discharge, you must complete certain credit counseling and debtor education requirements.
Credit counseling. Before you can file for bankruptcy, you are required to receive credit counseling from an approved agency. When you file your case, you will need to submit your certificate of completion to the court. If you don’t obtain credit counseling prior to filing your bankruptcy, the court will typically dismiss your case. (Learn about the credit counseling requirement in bankruptcy.)
Debtor education. After you file your case, you must also complete a course in personal financial management (called a debtor education course). If you don’t complete the debtor education requirement, the court will not issue a discharge in your bankruptcy. (Learn about the debtor education requirement in bankruptcy.)
When you file for bankruptcy, you must complete a packet of forms that includes your petition, schedules, statement of financial affairs, and other required documents. If you don’t have an attorney, it’s your responsibility to know which forms to file and how to complete them.
You can obtain the official bankruptcy forms from the website of the United States Courts at www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx. Your bankruptcy court may also require you to fill out additional local forms. See How to File Chapter 7 Bankruptcy for an overview of the forms, with examples of completed forms.
Each bankruptcy court has its own set of local bankruptcy rules and procedures each debtor must follow. In addition, after you file your case, you must provide your bankruptcy trustee with certain supporting documents (such as pay stubs and tax returns). This means that your bankruptcy trustee may also have his or her own additional requirements or guidelines that you must satisfy.
If you don’t follow all of the local rules in your area, it can cause delays or even lead to dismissal of your case. In most cases, you can find your bankruptcy court’s local rules by going to its website. To find your local court, go to www.uscourts.gov/court_locator.aspx.
Bankruptcy exemptions allow you to keep a certain amount of property in Chapter 7 bankruptcy (and they reduce the amount you pay to unsecured creditors in a Chapter 13). But you must conduct a fair amount of research to learn about:
Exemptions are extremely important because they can make the difference between keeping or losing an asset in bankruptcy. For this reason, make sure to research your state’s exemption laws carefully before filing your case. (Learn more about how bankruptcy exemptions work.)
Typically 20 to 40 days after you file your bankruptcy, you must to go to a required hearing called the meeting of creditors (also called the 341 hearing). At the 341 hearing, the bankruptcy trustee (and any creditors who choose to attend) can ask you questions under oath about your bankruptcy and your financial affairs.
The court will mail you a notice containing the date, time, and location of your meeting of creditors. If you don’t go, the court will usually dismiss your bankruptcy. (Learn more about the meeting of creditors.)
In Chapter 13 bankruptcy, you pay back a portion of your debts through a repayment plan. While you propose the terms of the initial plan, the court must confirm (approve) your plan to finalize it. If you don’t propose a feasible repayment plan that complies with all applicable bankruptcy laws, the trustee or your creditors can object to its confirmation.
Filing a Chapter 13 plan that the court will approve is a difficult (but not impossible) task in bankruptcy. But you must be prepared to do a significant amount of research to learn how to prepare a feasible Chapter 13 plan. (Learn more about how the Chapter 13 repayment plan works.)
Even if you want to file on your own, talking to a bankruptcy attorney prior to filing your case can help you discover hidden dangers and avoid mistakes. Many bankruptcy attorneys offer free consultations and can provide you with valuable information about the bankruptcy process. For this reason, it’s generally a good idea to consult an attorney prior to filing your case.