Our Bankruptcy Attorney Blog

Bankruptcy in the United States is an element of federal law. Though there are some state-specific differences (for example, in respect to what kinds of property may be declared exempt in a Chapter 7 bankruptcy), for the most part the laws governing the bankruptcy process are the same throughout the country. One of the rights that individuals have before the bankruptcy courts is the right to file “pro se” (Latin: “for oneself”, sometimes called “pro per” for propria persona), or without an attorney. Generally most companies and other entities (partnerships, trusts, etc.) are required to have properly accredited legal representation, but this is not the case for individuals.

While anyone has the right to file for bankruptcy by themselves without legal representation, in general this is a terrible idea. Bankruptcy law is extremely complex and extremely technical, involving very specific steps that have to be done in a very specific sequence. Any mistake, from an accidental omission to a simple oversight of a document submission can result in very serious consequences. Failure to list an item for example may result in that item not being exempted though it qualified for exemption; or just as easily may be viewed as a deliberate effort to “hide” the asset from the court opening the filer up to sanctions from the court and/or having their case dismissed out of hand. Bankruptcy law is a specialized legal field which represents its own specialist niche in the legal field and this specialization is justified in view of the complexity of the process.

Further, the Bankruptcy Abuse Prevention and Consumer Protection Act, which was completely written by the commercial lending industry and implemented as law in 2005, mandates a number of even tighter restrictions on leeway afforded the bankruptcy judges. Many small mistakes that might have been forgiven by a sympathetic judge in the past now result in an immediate dismissal of the case. On top of this, depending on how far the case had proceeded before it was dismissed, the debtor may lose the right to re-file, leaving them with no recourse to the bankruptcy courts at all. Therefore, even a small accidental oversight can result in a calamity if the person filing pro se does not know what they are doing.

Obviously anyone considering filing for bankruptcy is already hard pressed financially, so hiring an attorney may not seem like a good investment, but this is only true in the most basic of cases. If the debtor has an extremely simple situation – no cash, no assets – then they may be able to file on their own without too many problems. However, for anyone that owns a home, has items to exempt from liquidation, has an income, or even considering a Chapter 13 bankruptcy; getting legal representation is well worth the effort. Depending on how dire the borrower’s situation is, they may qualify for free legal counsel from a number of charitable legal aid organizations. The bankruptcy courts themselves strongly advise that all filers have legal representation and provide resources on where to look for free legal assistance on their website (www.uscourts.gov > FederalCourts > Bankruptcy > BankruptcyResources > FilingBankruptcyWithoutAttorney).

Tags: bankruptcy

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