5 Drawbacks of Filing for Chapter 7 Bankruptcy Without a Lawyer Filing for bankruptcy without a lawyer is called filing “pro se.” Filing pro se is legal, but strongly discouraged. We aren’t only saying that because we’re bankruptcy lawyers – it’s for your own financial protection, as you’ll learn in just a few moments. Before you file Chapter 7 without an experienced Sacramento Chapter 7 attorney, consider these five risks of pro se bankruptcy. Risk #1 — Chapter 7 might be wrong for your financial situation. If you’re having trouble with excessive debt, you need to take action. However, that doesn’t mean filing Chapter 7 in Sacramento is the right way to handle the issue. Chapter 7 is specifically designed for people with lower income and minimal assets, and usually isn’t the most effective way to prevent foreclosure. If you have high income or want to stop foreclosure, you might be better off filing Chapter 13 in Sacramento, or even exploring alternatives to bankruptcy. Depending on the nature of your debts, you might be better served by a mortgage modification, debt consolidation, or other non-bankruptcy options. Risk #2 — You could make a mistake on your bankruptcy paperwork – and be punished for it. A document called the “bankruptcy petition” creates a record that you are filing for bankruptcy. However, the petition isn’t the only document you need to prepare. You’ll also be expected to submit dozens of supporting documents that list all of your debts, assets, and creditors in extremely specific detail. If you make an error or leave something out, it could cause costly delays in your case. If the error is serious, the bankruptcy court could dismiss your case altogether. The longer it takes to resolve your case and obtain a discharge, the longer you will remain saddled with debt – and in the meantime, the greater your risk of foreclosure, repossession, wage garnishment, and other problems becomes. Risk #3 — If you choose the wrong exemptions, you’ll lose property you could have kept. The way Chapter 7 works is that the bankruptcy court authorizes a trustee to sell some of your property. The proceeds from the sale help to repay your creditors, and most of your debts are eliminated. Bankruptcy “exemptions” can help you prevent your property from being sold – but only if you choose exemptions that make financial sense. Sacramento residents have two different options for bankruptcy exemptions, and making the wrong choice could cost you thousands. Risk #4 — If your creditors cause problems, you won’t be able to defend yourself as effectively. All it takes is a single uncooperative creditor to throw a wrench into your Chapter 7 bankruptcy case. For example, a creditor might try to lift the automatic stay, which is what protects you from debt collectors while your case is pending. You need to be prepared with an aggressive, reliable back-up plan in the event of any dispute or setback. Risk #5 — Filing for bankruptcy without an attorney is often much more expensive than hiring a lawyer. Legal costs can cause concern for those who are thinking of filing for bankruptcy. If you’re worried about how you will pay for a bankruptcy attorney, please keep two points in mind:
Representing yourself is likely to cost you more than hiring a Chapter 7 lawyer in the long run. Legal mistakes will cost you time and money, which is exactly what you need to avoid when the clock is ticking on your debts. Without an attorney, you are at greater risk of missing deadlines, filing for the wrong chapter of bankruptcy, misinterpreting bankruptcy statutes, filing the wrong motions, and encountering other problems that waste your resources.
At The Bankruptcy Group, we understand that legal expenses are often a concern for our clients. We know that you are in a difficult financial position if you are considering bankruptcy, and will work with you to find affordable payment options.