Unlike a business, an individual debtor doesn’t need an attorney to file for bankruptcy relief. But it's not always a good idea. Whether it will make sense will likely depend on:
Learn about the differences between Chapter 7 and 13.
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:
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:
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.
Learn more in Bankruptcy for Small Business Owners: An Overview.
You’re Filing for Chapter 13
Chapter 13 bankruptcy is a powerful financial tool that can allow you to:
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 difficult 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:
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.
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:
Learn more about options if you can’t afford a bankruptcy attorney.