My friend, Rachel Foley posted an excellent note on not representing yourself in bankruptcy. I read this almost immediately after returning to my office from a Chapter 13 “Meeting of Creditors” – the hearing all debtors have to go through after filing.
During the hour and a half, the trustee questioned about ten debtors as to their petition, schedule and plan. I couldn’t help notice that these were tough cases, not unusual, but none of them fit into a simple cookie-cutter form. My case involved multiple pieces of property, most of which the debtor is losing to foreclosure, so it took a bit of explaining how the proposed plan was going to work.
Of the ten cases, seven of the debtors were represented by competent counsel and three were representing themselves. All of the seven cases, where an attorney was involved, are going to be okay. Either they were fine after some explanation, or there were a couple of minor changes that have to be made.
All three of the cases where the debtors are representing themselves are going to get dismissed. This was clear from the trustee’s remarks. In one case a hearing to dismiss was already set. In one case, the debtor was over the limits for unsecured debt and therefore not eligible for a chapter 13. And in the third case, the debtor simply couldn’t possible make the payments she promised to make based on the schedules she filed and what she told the trustee.
Could these cases have been “saved” by a good bankruptcy counsel? Probably. Maybe a Chapter 13 was the wrong way to go, maybe all of the debt wasn’t really unsecured (and therefore not over the limit), and maybe the schedules didn’t take into account all of the income or overstated the necessary expenses. There are many tricks and traps in the process. A good attorney will have seen many of them before, and will know where to get the answers to a problem he hasn’t seen. You just can’t do it yourself, unless you are very very lucky (and are silly enough to gamble your economic well being and assets on luck).
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