Bankruptcy

Do I Need An Attorney To File Bankruptcy?

By Kevin Gipson, New Orleans Bankruptcy Attorney

Do you need an attorney to file bankruptcy?

No!  Absolutely not!

There is no requirement that you be represented by an attorney when you file a bankruptcy!  In fact, I found a website today that tells you how to do one yourself!  Tips Catalog!

Should you use an attorney to file your bankruptcy?

Yes!  Absolutely!

There is no question that Americans have become a society of do it yourselfers.  All you need to do to prove this is to look at the number of hardware stores and car parts stores that  are out there these days.

It is therefore not surprising that in a do it yourself culture that there are now many services available on line that, for a fee, offer the potential debtor the opportunity to do his own bankruptcy.

So why is doing your own bankruptcy a bad idea?

To best answer the question of why doing your own bankruptcy is a bad idea, I will tell the story of some do it yourself debtors at a recent creditor’s meeting:

 This was actually the debtors second creditor’s meeting because they had not provided the Trustee with documents that he had needed the first time their creditor’s meeting was scheduled.

Besides the fact that the creditor’s meeting needed to be rescheduled, the Trustee’s questions revealed a number of additional problems that would have been avoided had the debtors used an experienced bankruptcy attorney.  Among those problems were:

• The debtor’s had listed a second mortgage on Schedule F as an unsecured debt, when in fact the mortgage should have been listed on Schedule D as a secured debt;
• The debtor’s had used Federal exemptions when Louisiana has its own set of objections;
• The debtor’s use of the wrong exemptions had resulted in them not taking the correct exemption on their house and declaring two vehicles as exempt when this is not generally permissible under Louisiana’s exemption laws.

The Trustee continued the creditor’s meeting again to allow the debtors to amend their schedules.

Besides the problems with the documents filed, one additional interesting fact was disclosed:

The debtors revealed during questioning that he had paid $349.00 to use the online service, plus an additional $169.00 to prepare an amendment to their original bankruptcy filing.  Presumably, they were going to be charged another fee to make the additional amendments.

The trustee pointed out to the debtors that for what they had paid and will have to pay to get their bankruptcy completed, as well as the value of their lost time from work for repeated creditor’s meetings, they could easily have been able to afford the services of one of the attorneys in their area.

So, who is a Trustee?   What is a creditor’s meeting?  What is Schedule D?  Schedule F?  What is an exemption?

Don’t do it yourself.   An experienced bankruptcy attorney has the answers!

Full post as published by Bankruptcy Law Network on July 12, 2010 (boomark / email).