Bankruptcy is the legal process through which people or businesses seek to free themselves from debt obligations. There are three main types of bankruptcy in the United States, including Chapter 7, Chapter 13, and Chapter 11. Even though bankruptcy is a legal process, the law does not require you to have a lawyer when filing for bankruptcy.
Whether you need an attorney depends on several factors, including whether you can afford the attorney fees, the complexity of your case, and the type of bankruptcy you are filing. For instance, while you can file some simple Chapter 7 cases on your own, you may need a lawyer when filing a Chapter 13 case.
Bankruptcy proceedings occur in federal courts, and as with any other legal process, bankruptcy involves a lot of rules and complex procedures. Additionally, filing bankruptcy has long-term financial and legal implications; hence the need for careful preparations. A simple mistake or a misunderstanding of the legal process can have long-term effects on your life.
While having a lawyer is not a requirement, filing for bankruptcy requires a thorough understanding of the law; hence it can be hard for people without legal training. Even with legal training or instances where the bankruptcy case seems simple, you will need to do a lot of research and preparations. Essentially, you will need to put in a lot of time.
Whichever way you file for bankruptcy, the federal court expects you to adhere to all the bankruptcy rules and procedures. The court assumes you are familiar with all the federal regulations, including the U.S Bankruptcy Code and local court rules. While most of these rules are available to the public, you might need a lawyer to interpret them.
Additionally, it is illegal for court employees, including judges, to offer legal advice to bankruptcy litigants. Therefore, they are of little help in case you make legal mistakes during the bankruptcy proceedings. Considering the financial and legal consequences of making mistakes in a bankruptcy case, having a lawyer is a good idea.
Even though it is not a requirement, having a lawyer might be the difference between a successful and an unsuccessful bankruptcy case. As an expert, a bankruptcy lawyer will smoothen the process for you and help you avoid costly mistakes. Generally, a lawyer helps you to understand the bankruptcy process, including laws and procedures.
Mostly, some people file for bankruptcy, even when it is not necessary. Without a proper understanding of what bankruptcy can or cannot do for you, the decision to file might leave you in a worse financial situation. In addition to helping you decide whether or not you need to file, a lawyer will also provide you with alternatives to bankruptcy.
Since different types of bankruptcies have different requirements and benefits, a lawyer will help you decide under which Chapter to file. Bankruptcy will not solve your specific problem if you file the wrong Chapter. You might even lose your assets. For example, to keep your home or car after you file, you need to file for Chapter 13 instead of Chapter 7.
Even if you choose the correct Chapter, the process is complicated, and you are still likely to make a mistake. For example, you may fail to file all the required bankruptcy documents. Failure to complete the necessary paperwork will most likely lead to the dismissal of your case.
As a person without a legal background, you might not be aware of the property exemptions available in your state. Consequently, you risk losing your valuable property. A lawyer will help you complete and file required bankruptcy forms, advise on property exemptions, tax issues, and assist you with other critical aspects of your bankruptcy case.
Additionally, the bankruptcy process is dynamic, and complicated issues might arise in the course of bankruptcy proceedings. For example, a creditor might file a motion for adversary action or raise other complaints against you, including fraud. Without legal representation, you may not be able to respond to motions or complaints against you. Consequently, your rights may be affected.
Even if you know how to respond to motions and complaints or have legal training, filing for bankruptcy can be complicated, exhausting, and frustrating. A lawyer advises you on critical issues and also lightens your burden allowing you to focus on other things.
Filing without legal representation is known as ‘pro se’ filing and is an option even in other legal proceedings. If you must file for bankruptcy on your own, to be successful, you need to educate yourself on the bankruptcy process, including on all the laws and procedures. You need to research and gather as much information as you can about bankruptcy.
Suppose your decision to represent yourself is as a result of financial hardships. In that case, you might still be able to find a lawyer who can offer free or cheap consultation services without representing you. However, while you can learn about bankruptcy on your own and probably get free guidance or consultation, it is not the same as having a skilled bankruptcy attorney represent you.
The law does not require you to be represented by an attorney in a bankruptcy case. You can represent yourself with or without legal training or guidance. However, considering the long-term financial and legal consequences of bankruptcy, it is essential to involve someone who understands the process and can successfully get a discharge. Considering the complexity of the bankruptcy process and the impact of related mistakes, filing for bankruptcy without a lawyer, may not be the best option.