Can I File for Bankruptcy Without an Attorney?

Unlike a business bankruptcy, an individual debtor doesn't need an attorney to file for bankruptcy relief. But it's not always a good idea to do so. Whether filing on your own will make sense will likely depend on:

• whether you're filing for Chapter 7 or Chapter 13 bankruptcy
• the amount of your income and property
• the complexity of the matter, and
• whether you're comfortable researching and handling your case.

Learn about the differences between Chapter 7 and 13.

When You Might Not Need a Bankruptcy Attorney

If you have a simple Chapter 7, you will have a better chance of completing your case without a bankruptcy lawyer. The hallmarks of a simple Chapter 7 would include a:

• household income below your state's median income level
• little or no property
• no recent property transfers or payments to preferred creditors (learn how the trustee can recover the property for your creditors), and
• your creditors aren't likely to dispute a debt.

But keep in mind that even filing a simple Chapter 7 bankruptcy requires a fair amount of time and research on your part. If you want to complete your case, obtain a discharge, and not put any of your property at risk, you have to:

• accurately fill out several bankruptcy forms and schedules
• learn how bankruptcy laws work
• research your state's exemptions, and
• follow all the rules and procedures necessary to complete the bankruptcy process.

When You'll Need a Bankruptcy Attorney

It's usually best for any bankruptcy filer to hire an attorney. That said, as discussed above, individuals can represent themselves in the right circumstances. It just depends on the case and the comfort level of the person.

By contrast, even though a business can wind down in Chapter 7 or reorganize in Chapter 11, a company can't represent itself. An attorney is necessary whenever a business files for bankruptcy.

You're Filing for Chapter 13

Chapter 13 bankruptcy is a powerful financial tool that can allow you to:

• catch up on your missed mortgage or car loan payments
• eliminate unsecured junior liens (such as a second mortgage) from your home through lien stripping, or
• reduce the principal balance or interest rate on your car loan with a cramdown.

But Chapter 13 bankruptcy is considerably more complicated and labor-intensive than Chapter 7. If you want the court to confirm (approve) your Chapter 13 bankruptcy, you must propose a feasible repayment plan, which is challenging to do without legal knowledge and the software used by bankruptcy lawyers.

Further, if you wish to pay less on your house or car by stripping a second mortgage or cramming down a car loan, you'll need to file a motion or adversary proceeding with the court, which also isn't an easy task.

Learn more in Releasing Liens in Bankruptcy: Lien Avoidance.

You're Filing a Complicated Chapter 7

While you might be able to handle a simple Chapter 7 bankruptcy on your own, it makes sense to hire an attorney for more complicated cases. For instance, it's a good idea to hire an attorney if you:

• have a significant amount of income that might potentially disqualify you from filing a Chapter 7 (learn about the Chapter 7 bankruptcy means test)
• have a lot of assets that might be at risk
• own a business
• have debts that might not be dischargeable in bankruptcy
• recently transferred valuable assets out of your name, or
• have creditors that might challenge your discharge.

Of course, if you don't believe you can navigate the bankruptcy process, or if you aren't comfortable with it, it's probably best to hire a bankruptcy lawyer.

How to Find a Good Bankruptcy Attorney

When seeking legal representation in bankruptcy, you'll want to look for an experienced bankruptcy lawyer, not a general practitioner. Not only does bankruptcy require understanding how many principles interrelate, making a mistake can be costly. Most lawyers won't accept a bankruptcy matter unless they practice bankruptcy law regularly.

Here are some suggestions for finding the best bankruptcy lawyer for your job.

Personal Referrals

Knowing someone who had a good experience with a bankruptcy lawyer is often your best source. Call that lawyer first. Your lawyer might know a good bankruptcy lawyer, as well. Or, if a family member or a friend used a lawyer in a nonbankruptcy matter, ask that lawyer if they would recommend a bankruptcy attorney.

Group Legal Plans

If you're a member of a plan that provides free or low-cost legal assistance and the plan covers bankruptcies, make that your first stop in looking for a lawyer.

Lawyer-Referral Panels

Most county bar associations will give you the names of bankruptcy attorneys who practice in your area. Keep in mind that bar associations don't screen the lawyers. It's up to you to check out the credentials and experience of the person to whom the bar association refers you.

Online Directories

You can also find lists of bankruptcy lawyers online. A useful directory will provide information about the lawyer, such as the types of cases they handle, their philosophy on representing clients, and typical fees. One place to start is Nolo's lawyer directory, at www.nolo.com/lawyers. Also, check out www.nacba.org, a site that provides contact information for members of the National Association of Consumer Bankruptcy Attorneys.

Legal Aid

Legal Aid offices offer legal assistance in many areas. A few offices do bankruptcies, although most do not. The federal Legal Services Corporation partially funds Legal Aid, and it's intended for low-income people. It's more likely for a Chapter 7 filer to find help. Few Chapter 13 bankruptcy filers will qualify.

Legal Clinics

Many law schools sponsor legal clinics and provide free legal advice to consumers. Some legal clinics have the same income requirements as Legal Aid; others offer free services to low- and moderate-income people.

If You Can't Afford a Bankruptcy Attorney

While having a bankruptcy lawyer on your side will almost always be better than filing yourself, not all debtors can afford legal counsel. If it isn't a possibility, you might consider:

• getting help from a local free clinic or legal aid society
• finding a pro bono attorney to accept your case at a free or reduced rate, or
• paying most of the attorneys' fees through a Chapter 13 repayment plan.

Learn more about options if you can't afford a bankruptcy attorney.