Filing a bankruptcy takes more than just filling out the forms. So how do you file a Chapter 7 or Chapter 13 Bankruptcy without an attorney? First, perhaps some people read our book. Hopefully, they use the forms and attempt to file Chapter 7 if they have no assets and income. If the Trustee is helpful, they may get it through. But often they omit items or don’t understand when to file schedules. Unfortunately, failure soon follows. However, our manual explains most of the issues you face when you file Chapter 7 or 13.
How to File Chapter 7 or 13 Bankruptcy Without an Attorney
My suggestion to anyone who is filing is to spend 4–6 hours reading our manual. If you do, you will at least understand what is going on. If you understand and prepare, the process is easier. Moreover, you get better results and make more money from filing. However, violate the rules, and it will cost you.
Even an attorney with experience usually takes two or more hours with you just to prepare the schedules. They also take two hours to check them for errors and completeness. Then, the attorney spends an hour or two preparing for the hearing, going to court, in court, and returning from court.
You don’t have an attorney’s experience and knowledge. As a result, it takes you a lot longer to file and you won’t get the same results. For example, for something an attorney spends eight hours on, you might spend 16–24. Plus, it’s almost a guarantee that it still won’t have good outcomes.
Instead, try thinking about it in these terms; the attorney charges approximately the cost of an average refrigerator for Chapter 7 for a normal single person. That’s a small price for saving much, much more. Don’t you agree?
| Preparing the Schedules | 2 hours |
| Check for Errors and Completeness | 2 hours |
| Hearing preparation and attendance | 2 hours |
| Time spent with creditors calls and items post-filing. | 2 hours |
| 8 hours minimum |
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⎆ Filing bankruptcy pro se.
When a debtor files a case without an attorney, they might think filing is simple. They may think 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. In fact, the Chapter 7 trustee is looking for mistakes. Then, if he spots a property that has not had the exemption applied properly, he takes the property and keeps 25%. You can’t dismiss the case. He owns the property even if you transferred it to your brother.
Miss an exemption or miss listing a property and it may be sold. There is no leniency just because you acted without an attorney when the panel trustee gets 25% of anything he can take from you. The banks hire experienced attorneys to stop you from discharging the debt to them. If they can characterize you as filing in bad faith your case is dismissed or converted.
Bankruptcy is complicated. When the law changed in 2005 over half of the attorneys, who filed bankruptcy cases quit because it is too complicated. The price of filing tripled because of how everything had to be documented and double-checked for completeness, errors, and omissions.
Every year someone thinks they know how to pilot the plane. First, they hop into the seat without a license to fly. Then, they might get down the runway and get the plane in the air. In fact, they might even get it close to their destination. But, “close” isn’t good enough for bankruptcy.
In California, 95% of the pro se cases fail and the landing hurts. Hardly a week goes by without a call from someone who didn’t use a bankruptcy attorney with experience. Then, they want us to fix their case after it has been dismissed.
⎆ Filing Chapter 7 without an attorney.
If you have a car loan mortgage or any other secured loan, you will need to understand whether to reaffirm redeem or surrender the property. If you don’t fill out the 20-30 page reaffirmation agreement properly the car lender may take the car back, or the mortgage company may not refinance the loan later. They will not report your on-time payments.
If you need to redeem the car because you owe more than it is worth you will have to file a motion to redeem. If you don’t know how to get the evidence in to redeem the auto, you will have to live with the loan which may be thousands more than what it is worth. Also preparing the motion to redeem or reaffirmation agreement takes time. You don’t do this every day as a bankruptcy attorney does.
Even if you surrender an auto in Chapter 7, if you don’t do it right you will have the property tax bill continue if you don’t file the affidavit of incomplete transfer with the court clerks office. If you were sued, did they file a judgment lien on your home? You need to remove that. Can you do that yourself? None of this stuff happens automatically.
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 for a pro se Chapter 7 is around 60%. As judges put it; “it is extremely difficult to do successfully.”
⎆ Filing Chapter 13 without an attorney.
Over 95% of the people who file Chapter 13 without an attorney in California have their cases dismissed. Many of those people who file were trying to keep their home, and by far the majority of them lost their home by not using an attorney. Sure there is a cost to using an attorney to file a Chapter 13. But filing a Chapter 13 is much more difficult than filing a Chapter 7 which is the reason for the larger fees. All of the Chapter 13 attorneys are normally paid the same fee amount. So why not use the best attorney you can find. Hint the best attorney is rarely the largest office.
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 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. Your success and results vary from attorney to attorney.
⎆ Do I need an attorney to file bankruptcy?
Yes, you can file a bankruptcy pro se. But if you file pro se and you are assumed to know the rules, 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 two years ago, and they may be learning from you. If you file pro se, you are learning how to file bankruptcy on yourself. If filing pro se sounds like motel room surgery, it’s because it is like motel room surgery.
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 Chapter 13, but you can’t 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 are at least double the normal fee.
⎆ Preparing for bankruptcy today takes 3 times longer than in 2004.
The attorney fees in our area have tripled since 2004 from 500 to about 1500. So I understand the temptation to do it yourself. The work in preparing a petition has more than tripled. It’s work you don’t know how to do and generally don’t want to do. Some people with no income and no assets sometimes can successfully fill out the forms and supply the documents to the Trustee. But what you gain by hiring an experienced attorney more than pays for the cost. 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 even know what expenses are allowed.
⎆ What does it take to prepare a case?
So what do you or an attorney have to know to properly prepare a case? First, you have to know the Bankruptcy Code and time limits. As an example of the depth of that knowledge, the copy of Colliers I use is over 1,000 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 the collection laws including the FDCPA rules, and the local rules for that district.
What’s more, each judge has his or her own rules and how they want you to prepare your file. First, Judge Lloyd wants no plan less than 70% without her looking it over. Then, Judge Stout and Fulton will accept a 50% plan. Finally, Judge Lloyd will not allow telecommunication expenses to be over 5% of your budget; the other two judges will.
The individual trustees and the US Trustee also have their own ideas on how to do it. In fact, there are more potential complications than brain surgery. The following are some of the common errors:
- Omit a debt you owe it.
- Appear to be dishonest get barred from filing for years.
- They can audit you. So, be accurate or you invite an audit.
- It’s possible for you to accidentally commit fraud and go to jail. Remember, bankruptcy fraud is a crime.
- You have to know both the federal, state and local rules.
- Passing the means test normally requires software that you don’t have to do the calculations.
- Timing is everything. Miss a timing rule, and you have to pay taxes or other debts you could have discharged. Or, file the debtor education late, and you don’t get the discharge.
- Creditors always have an attorney. You don’t.
If you are thinking about filing bankruptcy without an attorney, I strongly encourage you to think again. In fact, calling for a consultation with a bankruptcy attorney with the right experience will save you thousands. So, why take this huge chance with your future?
Resources for Bankruptcy
Louisville Kentucky Bankruptcy Forms
Western Kentucky Chapter 13 Bankruptcy Rules
How to Easily and Quickly File Bankruptcy in Kentucky
Student Loan Death and Disability Hardship
Louisville Bankruptcy Lawyer & Foreclosure Lawyer
If you are thinking about filing bankruptcy, don’t delay because timing is crucial. I am here to help you. So, contact my office right away to start the conversation. Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905
