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How To File For Bankruptcy Without A Lawyer

how to file for bankruptcy without a lawyer

You may know that filing for bankruptcy without a lawyer is known as filing Pro Se. However, the big question is: do you know how to file for bankruptcy without a lawyer? If you don’t, this article will guide you on how to go about it.

Remember that filing for bankruptcy is a serious business that requires attention. Bankruptcy laws are intricate, meaning you can face serious consequences if you make mistakes in the filing process. However, you can do it successfully if only you pay attention.

Key takeaways

  • Filing for bankruptcy without a lawyer is called filing Pro Se.
  • It is a complex process, but you can do it yourself.
  • Filing for bankruptcy is provided for under Chapters 7, 9, 10, 11, 12, 13, and 15 of Title 11 of the U.S. bankruptcy code.
  • Chapter 7 bankruptcy is the most common, and it allows individuals to liquidate assets to pay creditors.
  • You need to follow a set of steps until you finally receive a discharge of debt.

What is bankruptcy?

Bankruptcy is a term used to describe a legal process initiated when businesses or individuals are unable to pay their outstanding debts. When you are bankrupt, it means that you are “legally” proven to be broke, and you cannot pay what you owe others.

As a result, you file for bankruptcy to pave the way for the liquidation of non-essential assets and excess income to pay creditors. Filing for bankruptcy helps individuals and businesses eliminate some or all of the debt accrued.

There are several different types of bankruptcies. However, Chapter 7 bankruptcy is the most common. It is called Chapter 7 bankruptcy because the rules followed are contained in Chapter 7 of Title 11 of the U.S. bankruptcy code. This code stipulates the order to be followed when settling outstanding debts.

Other common types of bankruptcies include Chapter 11 and 13 bankruptcies. There are also Chapter 9, 10, 12, and 15 bankruptcies, but they are rare. These names come from the chapters of Title 11 of the bankruptcy that apply to each case.

how to file for bankruptcy without a lawyer

Chapter 7 bankruptcy

Almost all people apply for Chapter 7 bankruptcy. It allows them to dispose of unsecured debts. For instance, medical bills or credit card debts can be disposed of if you successfully file for Chapter 7 bankruptcy.

Filing for Chapter 7 bankruptcy means you are liquidating your assets to clear debt. However, it helps people who do not have valuable assets or those who only own exempt property like household goods and clothing. Such people benefit because when their property is sold to repay debts, they are relieved of part or all of the unsecured debts and retain the exempt property.  

It is good to note that all bankruptcy matters are handled in federal courts. The court decides if the petitioner qualifies for bankruptcy and whether they should be discharged of their debts. Then, the federal judge appoints a trustee to oversee the process. Generally, the petitioners are guided throughout the bankruptcy filing process by practicing attorneys, but one can do it without an attorney.

How to file for bankruptcy without a lawyer

Now that you know how bankruptcy works, you can proceed to file for it if you qualify. Filing for bankruptcy without a lawyer is a complex process and is not recommended for everyone. However, if you are determined to proceed without an attorney, you should follow these steps when filing for bankruptcy.

Step 1: Determine if you qualify for bankruptcy

The court will not declare you bankrupt if you do not qualify. Therefore, the first step when filing for bankruptcy is determining if you qualify. Generally, people file for bankruptcy when they lose jobs, divorce, businesses collapse, or accumulate huge medical costs.

You qualify for bankruptcy if you demonstrate that you suffered unexpected financial distress. The bottom line is to show that your income, expenses, and debts are mismatched in that you cannot comfortably pay your accrued debts.

Step 2: Check the type of bankruptcy you qualify

Generally, most people file for Chapter 7 bankruptcy, but some file for Chapter 13 bankruptcy. Chapter 7 bankruptcy is a liquidation bankruptcy that discharges most unsecured debts. On the other hand, chapter 13 bankruptcy is a reorganization bankruptcy that allows you to keep your assets and repay your debts over time.

You only qualify for Chapter 7 bankruptcy if you pass a means test. This test compares your income to the median income in your respective state. If your income is below the median, you qualify for Chapter 7. You may still qualify if your income is above the median, but you must pass a more complex means test.

You only qualify for Chapter 13 bankruptcy if you have a regular income and your debts fall within certain limits. Those who fall under this category earn more than those who qualify for Chapter 7 bankruptcy. This type of bankruptcy helps them create a workable plan to repay their debts.

Step 3: Gather your financial information

Before you file for bankruptcy, you must collect and keep all your financial information. This information includes your income, expenses, debts, assets, and any recent financial transactions.

It is also a requirement that you have your tax return statements for the past two years. Bank statements and other financial documents will also be required. Ensure all these documents are available before you file for bankruptcy.

Step 4: Analyze your debts and check for previous judgments

At this stage, you have all the information and financial statements you need. You can easily analyze all the debts you have. You also need to check if a previous judgment was issued against you. Such judgments could have originated from property ownership court cases.

how to file for bankruptcy without a lawyer

Step 5: Review your assets

When you file for bankruptcy, you are willing to sell your assets to repay debts. Therefore, you need to know which assets you have. Remember that not all assets can be sold because bankruptcy rules provide for exempt assets.

Assets like personal items and household goods are exempted, meaning you will not lose them when the bankruptcy application is accepted. Sometimes, your personal car can be exempted depending on its cost.

Step 6: Attend pre-filing credit counseling

It is a requirement that you must complete credit counseling from a government-approved agency before you file for bankruptcy. The counseling session should take place within 180 days before the day of filing. You will be disqualified if you do not get counseling services from an approved provider.

Step 7: Complete the bankruptcy forms

Once you have all your financial information and completed the counseling, you must complete the bankruptcy forms. These forms are available online or at your local bankruptcy court. The forms can be complex. Therefore, it is important to read the instructions carefully and provide accurate information.

Step 8: File your bankruptcy forms

Now, you can file the completed bankruptcy forms. You should file them with a bankruptcy court in your location. You will need to pay a filing fee, which varies depending on the type of bankruptcy you are filing for.

There is a provision for a fee waiver for those who cannot afford to pay. You can download the fee waiver from the website of the Administrative Office of the U.S. Courts.

Step 9: Attend the 341 meeting

After you file for bankruptcy, you will need to attend a 341 meeting. This meeting is also known as the meeting of creditors. The purpose of the meeting is to discuss with the bankruptcy trustee and allow them to ask you questions about your financial situation. Creditors may also attend the meeting and ask you questions.

Step 10: Complete a financial management course

Before your debts can be discharged, you will have to complete a financial management course. This course is designed to help you manage your finances and avoid future financial problems.

Step 11: Wait for discharge

You have to wait to be discharged. Usually, it may take anywhere between months and a few years. If you filed for Chapter 7 bankruptcy, your eligible debts may be discharged after the meeting of creditors.

If you filed for Chapter 13 bankruptcy, you will need to enter into a repayment plan, and upon successful completion, the remaining eligible debts may be discharged.

Important considerations

Remember that bankruptcy laws vary by jurisdiction, and the steps above provide only a general outline. Filing Pro Se is also risky, and errors could result in the dismissal of your case. Therefore, legal advice is crucial, and it is recommended that you at least consult with a bankruptcy attorney, even if you will file on your own.

Take caution to ensure you do not make avoidable mistakes because they could complicate your already distressing situation. Nevertheless, it should be easy if you know how to follow instructions and provide all the needed information.

Wrapping up

Being bankrupt means you are unable to pay your debts under the current circumstances. No one would want to be declared bankrupt, but it happens because life is full of unexpected events. You may lose your job or get diagnosed with a terminal illness that will drain all your money.

When you find yourself in financial distress, and you cannot pay your debts, file for bankruptcy. It is possible to do it without hiring an attorney. The above steps will guide you on how to file for bankruptcy without a lawyer.