Bankruptcy law is complex. Even “simple” and straightforward Chapter 7 cases require a great deal of information along with calculations that are not at all intuitive.
Prior to the 2005 BAPCPA changes to the bankruptcy law a reasonably intelligent, careful person could find a bankruptcy “how to” book at the library and write out schedules that could be “good enough.” In those days, the United States trustee rarely got involved in a case and even the Chapter 7 trustees were more interested in plowing through their calendars than thoroughly examining debtors.
In the Northern District of Georgia, we used to have a couple of Chapter 7 trustees who would literally take less than 60 seconds to conduct a 341 hearing. On one occasion, I remember appearing before a trustee who simultaneously ate a sandwich, talked on the phone and conducted a 341 hearing.
In another instance, a Chapter 7 trustee (who later became a judge!) got tied up and he sent a young associate from his law firm to “sit in” for him. The associate wore a suit that was about 3 sizes too big.
All that has changed. The United States trustee now reviews every case. Chapter 7 trustee have been trained to look closely at budgets and to go after any asset they can find.
In my view, debtors are taking a huge risk if they file pro se (without a lawyer). Of course attorney’s fees in even basic cases are much higher than they were pre-BAPCPA, which leaves many honest but unfortunate debtors in something of a pickle because they cannot afford representation.
This morning, I received an email from such a debtor. He wrote me that had filed a Chapter 7 on his own and what was the deal with these “exemptions?” How did they apply?
I wrote him back very nicely to say that I could not give legal advice via email and that he needed to consult with a lawyer.
I fear however that this gentleman may really mess things up. In Georgia, debtors can shelter $10,000 of equity in a home. They can used up to $5,000 of any unused real estate exemption and apply this unused exemption to any property. Debtors also get a $600 “wild card” exemption. Married debtors can double these exemptions.
If a debtor does not claim his exemptions, however, his property will not be protected. I know trustees here in the Atlanta area who will file a motion to sell a debtor’s house or car or bank account to liquidate equity that could have been claimed as exempt but was not.
Exemptions can be confusing. I was re-reading the Georgia exemptions page on my Atlanta bankruptcy website and it occured to me that most non-bankruptcy lawyers and debtors would have no idea how the Georgia exemptions apply. My realization led me to add a page to my site entitled “Maximizing Your Georgia Exemptions.”
So, if you are thinking about filing for bankruptcy and you are tempted to do it yourself to save money, I strongly advise you to reconsider. Larger cities like Atlanta support many consumer bankruptcy lawyers who offer a variety of payment plans. Personal bankruptcy is no longer an undertaking for the non-expert.
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