Filing for Bankruptcy Pro Se

Filing a pro se bankruptcy is not a simple task. It requires more than a passing familiarity with the bankruptcy code. There are many aspects that have to be covered, ones that a pro se filer may not be aware of, and the more property one owns, the more complicated filling out the petition becomes. Certainly a bankruptcy can be filed pro se, but doing it right and obtaining the best results is entirely another issue.

What the Pro Se Filer Needs to Know

First and foremost, the petition is written in legal language. An individual without a law degree can learn how to read the petition, but it will take time. Also, there are concepts that do not easily translate into plain English, something that can become a problem. An incorrect conclusion will lead to problems with the court as the petition moves forward. However, there are excellent guide books out there that provide assistance with the petition and will explain what the schedule or form is looking for. Keep in mind that a guide is not a substitute for a lawyer.

Ensuring Complete Disclosure in the Petition

A pro se filer is going to have to accept the fact that he or she must provide every last iota of financial information to the court. Purposely omitting information will cause the the petition to be thrown out. Penalties range from having a case dismissed without prejudice, with prejudice and goes all the way up to being barred from ever filing in that district again.

Entering the required information into the petition can be an uncomfortable experience for many reasons. However, the importance of answering every question in the schedules and forms cannot be stressed enough. The petitioner is asking that the court absolve the petitioner of all his or her financial obligations. In return, the court expects complete honesty from the petitioner. Do not be anything less than completely honest.

Understanding How Exemptions Work

The two most common consumer bankruptcies are chapters 7 and 13. Both utilize exemptions, but they are applied differently in each. For example, since chapter 7 requires liquidation of non-exempt assets, anything that cannot be exempted is sold to pay creditors. In a chapter 13, exemptions are used, but the petitioner keeps his/her property. Instead, the value of items that are not exempt are used as a basis for determining how much creditors would have received if the case were a chapter 7.

Exemptions are what allow a petitioner to keep personal property, up to a specified dollar amount. These amounts are mostly dictated by state law, with only a handful of states allowing the use of either federal or state exemptions. As an example, the state has an exemption of a maximum of $3000 for a vehicle. You own a vehicle that is worth $2250, legally, you are allowed to keep your vehicle under this exemption in a chapter 7. There would be no overage to be applied to the estate in a chapter 13.

In a chapter 7, the petitioner can enter into a "buy back" agreement with the trustee on the case. The amount that is to be paid will be whatever is left over after the exemptions have been applied, and a valuation is determined by the trustee. A standard practice is to give the petitioner up to 12 months of payments to purchase the item. However, if cash is at hand to buy it back outright, a discount is applicable. A pro se filer will most likely not be aware of this, and the trustee may not offer it. A situation such as this needs a lawyer who is familiar with the "buy back" process to negotiate the best outcome for the client.

Document Preparation

If you are not comfortable filling out the bankruptcy forms yourself, you may consider using document preparation services. Many of these services provide non-attorneys to fill out your forms and file them with the proper court. However, be wary of which service you choose because there is always a risk in using non-lawyers. Also, non-lawyers cannot get you legal advice regarding the bankruptcy process. Since these services do not use lawyers, there is no overseeing entity such as the American Bar Association to ensure a certain level of compliance. In many cases, you can find an attorney for the same amount of money charged by non-legal preparation services. Additionally, lawyers can advise you as well as prepare and file your documents.

Chapter 7

Under Chapter 7, you will liquidate your assets to satisfy your creditors. Under this chapter, you are allowed certain property exemptions and these exemptions vary by state. Some states provide their own exemptions while other states follow the federal exemption. If you are not certain of your state's exemption, you may not know which of your assets are protected from bankruptcy. Also there are exemptions that apply to you as a single individual and, if married, to you and your spouse. Although you can research your state's laws an attorney is more experienced and would know which laws apply to the specifics of your case. Additionally, certain actions, like transferring assets within a certain period of filing, may bring you under suspicion. Certain missteps like this can be avoided by having an attorney to advise you.

Chapter 13

Chapter 13 allows you to restructure your debt and submit a repayment plan to the court for approval. This particular chapter is more complicated as there are statutory income requirements and you have to show that you can pay your arrearage debt and still maintain your current debt payments. You also have to meet with your creditors and the bankruptcy trustee. It is advisable to have an attorney with you during the creditors meeting to give you some leverage and protection.