Bankruptcy law is complicated, and debtors should seek the advice of an attorney experienced with bankruptcy. However, if you are determined to file alone, there is nothing prohibiting you from doing so. When you file for bankruptcy without the representation of a lawyer, it is called pro se. It is important to remember that the Clerk’s Office staff cannot assist you in preparing the necessary documents, and cannot provide legal advice.
The Bankruptcy Judges Advisory Group of the Administrative Offices of the United States Courts has developed a new web page containing information for individuals planning to file for bankruptcy on their own. This page offers resources including an explanation of which forms are appropriate for your situation and links to the United States Bankruptcy Code, the Federal Rules of Bankruptcy, and the American Bar Association’s Legal Help page.
Before You File
Bankruptcy law requires you to complete credit counseling before you file for bankruptcy. You must also complete Part 5 of the Voluntary Petition, titled “Explain Your Efforts to Receive a Briefing About Credit Counseling.” You can find a list of approved credit counseling agencies through the United States Trustee.
Starting the Process
Your first step in filing bankruptcy is to gather information about your current income sources, monthly living expenses, secured and unsecured debts, major financial transactions over the last 2 years, and assets. This is also a good time to collect your tax returns for the past 2 years, deeds to your real estate, titles for your vehicles, and loan documents.
After you have gathered the necessary information, you will file your petition and other forms. These include a form to list your income and expenses, and a form to claim your property exemptions. Under state and federal law, some properties can be kept when you are in bankruptcy. After you have submitted the appropriate paperwork, a stay goes into effect, and prevents most collection actions against you.
A trustee will be appointed by the courts to oversee your case. They will determine what type of bankruptcy you can file, review your paperwork, and distribute non-exempt property to your creditors. You will meet with them and any creditors that attend in a meeting of creditors. Here, you will answer questions about your finances and forms.
The 2005 Bankruptcy Act requires that your income and expenses be analyzed in order to determine if you will be eligible to file a Chapter 7 or a Chapter 13 Bankruptcy. If your income falls below the California median income, you are eligible to file for Chapter 7. If it does not, you will need to complete the Means Test, where you determine your remaining income after you have subtracted the expenses allowed by the state.
Once the type of bankruptcy you are eligible to file has been determined by the courts, the trustee will go through your non-exempt property and determine what will be seized and sold to repay your creditors. Your secured debts, or debts backed by collateral, need to be handled next. You will either give up the collateral property, pay the value of the collateral to redeem it, or reaffirm the debt for after the bankruptcy. If you represent yourself, you will have to attend a reaffirmation hearing before a judge.
After you file for bankruptcy, you will be required to take a financial management course. When complete, you will file Form 423, “Certification About a Financial Management Course.” This must occur before you can receive your bankruptcy discharge.
If you file a Chapter 13 bankruptcy, you will attend a hearing before a bankruptcy judge. They will confirm or deny your payment plan. In order for a payment plan to be considered, the following requirements must be met:
- Priority debts, such as child support and taxes, must be paid in full.
- Unsecured debts, such as credit cards and medical debt, may be paid in part.
- The repayment plan must be delivered in good faith.
- Unsecured creditors must be paid at least the amount they would receive if a Chapter 7 had been filed.
- All disposable income must be paid to the plan for at least 3 years.
Often, your repayment plan payments will be deducted automatically from your wages. You should make arrangements with the courts for this.
Closing Your Case
When your debts have been handled, or your Chapter 13 payments have been completed, your case will close and you will receive your bankruptcy discharge notice in the mail. For a Chapter 7 bankruptcy, this will typically occur 3 to 6 months after filing. Once your discharge has been granted, your case will officially close.
Getting Legal Help
It is possible to complete a bankruptcy case on your own. But when creditors are hounding you, you can’t afford to waste time making mistakes. An experienced bankruptcy attorney can help you complete your paperwork and successfully file your petition, as well as negotiate with your trustee on your behalf to minimize your losses.
Getting the assistance of a lawyer can have many benefits, including:
- Advice: Judges and court employees are unable to provide legal advice by law, so you may find yourself struggling to get your questions answered without legal counsel.
- Insight: An experienced attorney may know more options for your case, and could be able to guide you to a better option for your case.
- Knowledge of the process: A bankruptcy lawyer will be familiar with the process of filing for bankruptcy, the paperwork involved, and how to answer questions in your meeting of creditors.
- Complex cases: If your financial assets are particularly complicated, your debts are unusual, or there are some other circumstances that make your petition less-than-straightforward, you will benefit from having a skilled and knowledgeable advocate assisting your case.
Contact a Northbrook bankruptcy lawyer at our office today to schedule a free, in-person consultation.