Filing For Bankruptcy Without A Lawyer

“Why should I pay money I don’t have to a lawyer to file for bankruptcy? Isn’t it just filling out a few forms!”

Countless bankruptcy attorneys have heard words similar to these, not only from potential bankruptcy clients, but even from other (non-bankruptcy) lawyers. So should you, a person thinking about filing for bankruptcy, pay a lawyer to represent you or file pro se (without a lawyer)? There are a lot of articles on this, such as one I wrote, discussing some of the bad things that can happen because you don’t know what you don’t know. But simply looking at the numbers shows that it isn’t a good idea to file without a lawyer.

If you are filing for a Chapter 11 or a Chapter 13 reorganization, it is virtually impossible for you to get your reorganization plan confirmed, or approved, by the Court without using a lawyer. The rules for confirmation (just part of which are found here and here for Chapter 11 and here and here for Chapter 13) are so difficult and complex that the likelihood that you will be able to make it to the confirmation hearing, much less actually get your plan confirmed, is very slim. And this isn’t just my opinion–the US Bankruptcy Court for the Central District of California, which has more pro se filings than anywhere in the country, recently did a study that found that only 0.4% of pro se Chapter 13 filers were able to get their Plans confirmed. So if you want to have even a remote chance of success in your Chapter 11 or Chapter 13 case, you need a lawyer.

For Chapter 7 cases, the same study found that nearly 40% of all pro se Chapter 7 cases were dismissed., versus 5.4% for folks represented by attorneys. This means no discharge, a black mark on your credit without anything to show for it, and potential problems in a second try. Discharge, which is the whole reason for filing a Chapter 7, was obtained in only 60.9% of cases that survived dismissal, versus 94.5% of cases where the debtor was represented by a lawyer. Combining these two numbers means that if you file pro se you only have a 36% chance of getting a discharge if you file pro se. Not very good odds.

If you don’t want to use a lawyer, you can read the Official 44-page summary instructions for people who want to file pro se. Then you should read the Federal Rules of Bankruptcy Procedure and your district’s Local Rules (here is a link to Maryland’s). Make sure that you are familiar with your Bankruptcy Court’s applicable rulings, as well as those of your Circuit and the Supreme Court. Finally, you need to be aware of the “unwritten rules” that are practiced in your district. If you do this, you’ll have the basics of what any reasonably competent bankruptcy attorney has known for years.

And a “Bankruptcy Petition Preparer”? A complete waste of money. They aren’t allowed legally to do anything except take information you give them and enter it into the forms. They are prohibited from giving you any sort of legal advice, practicing law, or even suggesting what exemptions you should claim and under which chapter of bankruptcy you should file. The Official instructions say, “Although bankruptcy petition preparers can help you type the bankruptcy forms, they cannot tell you how to complete the forms, they cannot file the documents for you, and they cannot give you legal advice.” Many don’t even know what they’re doing–the California study found that 25% of BPP cases were either incomplete or dismissed.

But don’t take my word for the benefits of using a lawyer. After all, I am a lawyer. Here’s what the Official U.S. Bankruptcy Court instructions say:

You are strongly encouraged to hire a qualified attorney not only to help you complete the forms but also to give you general advice about bankruptcy and to represent you in your bankruptcy case

And the U.S. Bankruptcy Court for Nevada carries this warning (which is typical of most Bankruptcy Courts) on its website:

Individuals may appear “pro se” (that is, without an attorney) in the bankruptcy court. Bankruptcy can be a very difficult area in which to proceed pro se. You may wish to obtain the services of an attorney. Only an attorney is authorized to give you legal advice regarding a bankruptcy case or proceeding. The clerk’s office is prohibited from giving legal advice. For example, they cannot:
Explain the meaning of a particular statutory provision or rule;Give an interpretation of case law, rule, or statute;Explain the result of taking or not taking action in a case;Help you complete the forms, or advise you regarding what is legally require when a form elicits information from you;Tell you whether jurisdiction is proper in a case;Tell you whether a complaint properly presents a claim;Provide advice on the best procedure to accomplish a particular goal;Explain who should receive proper notice or service.
The judge’s responsibility is to supervise and administer the entire case and to resolve disputes between the parties. The judge must remain impartial. You cannot engage in ex parte communications with the judge. This means you cannot contact the judge to have a conversation about the case.
The individual who represents himself or herself is expected to follow all of the rules, and to know all of the applicable bankruptcy laws. This includes rules requiring written papers which must be filed, deadlines for filing pleadings, and requirements to serve the opposing side with your papers. You should wear proper clothing if you appear in court. Please no hats, shorts, thongs, or tank tops. You should be prepared to discuss the matter on the court’s calendar and be courteous to both the judge and the opposing party.

If you can’t get your case confirmed or get a discharge, you’ve just wasted the filing fee, your time, the Court and Trustee time, and the unrestricted automatic stay for your case, and will get a negative report for the filing on your credit report (they show filing, not dismissal or discharge). You may lose your home, your car, your money because you didn’t know how to do it correctly. And that isn’t your fault–you don’t practice bankruptcy law for living. But I do. Look at it this way–I probably couldn’t do your job as well as you do. I don’t have your knowledge, ability or experience. Likewise, you can’t do my job as well as I can…and my job is to protect you, and to make sure that you get your plan confirmed and a discharge entered.

Hire a lawyer to represent you in your bankruptcy case. It will go smoother, you are far more likely to succeed in your case, and you don’t have to worry that you are missing something.