Do I Need a Lawyer to File Bankruptcy?

23 Apr Do I Need a Lawyer to File Bankruptcy?

Paying attorney fees and costs for bankruptcy is a challenge. You have the right to represent yourself in bankruptcy (as in any other court). But should you? What are the risks of representing yourself in bankruptcy?

Off the top of my head, here are some of the things that you can get wrong when you don’t have the benefit of legal advice:

  • A Chapter 7 trustee may take property that you thought he couldn’t reach.
  • A Chapter 7 trustee may take property because you failed to claim an exemption that you are entitled to claim.
  • You may have claimed an exemption in error, leading the trustee to object to all your claimed exemptions.
  • You may have your case dismissed because of a technicality. Missing deadlines for taking certain steps can result in automatic dismissal of your case, and the court may lack the discretion to give you a second chance.
  • You may have debts that survive bankruptcy for failure to properly schedule those debts, or failure to respond to challenges to your discharge.
  • You may not be able to meet specific requirements to get a Chapter 13 plan confirmed.
  • You may pay more than you need to into your Chapter 13 plan, which my make it less likely that you will successfully complete a Chapter 13.
  • You may have liens on property, particularly judgment liens, that will survive bankruptcy because you don’t take the proper steps to avoid them.
  • If you have had a prior bankruptcy filing within a short time, you may lose the protection of the bankruptcy stay if you don’t take proper action at the proper time, and those requirements are extremely technical.
  • You may not qualify for the relief you seek due to timing or other issues.

Sheryl Shelin, of the South Carolina Bankruptcy Blog, examines the question more thoroughly than I do here, and cuts to the chase:

[A]s a matter of practice, you should never represent yourself in bankruptcy as a debtor. Get a lawyer. [Emphasis in original.]

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Däna (pronounced "Donna") Wilkinson, has been a bankruptcy lawyer in South Carolina for 20 years. She is certified as a bankruptcy specialist by the South Carolina Supreme Court.
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