Short answer: yes. The real question is whether you want to.
In the United States, you are entitled to represent yourself in any legal action; bankruptcy cases are no exception. Many people file their own bankruptcy petitions without the aid of an attorney. This is called filing a case pro se— roughly translated from Latin to mean “for yourself.” However, if you’re considering filing Chapter 7 or Chapter 13 bankruptcy, you may want to think twice before you get caught up in the fancy legal terms and start leafing through the Bankruptcy Code.
Pro Se Bankruptcy Filing Statistics
Consumer bankruptcy filers who handle their own cases generally have a much lower success rate than those who are represented by an experienced bankruptcy attorney.
Filing a Chapter 7 Bankruptcy Without an Attorney
“Success” doesn’t always mean the same thing in the bankruptcy context, but the goal of filing a bankruptcy petition is typically to receive a “discharge”. The discharge is a bankruptcy court order that wipes away the debtor’s personal liability on most debts and protects the debtor from any further creditor attempts to collect on the discharged debts. In the context of a Chapter 7 Bankruptcy, this is commonly known as the “fresh start.” Without a discharge, a Chapter 7 case is usually a waste of time and money.
The U.S. Bankruptcy Court with the largest number of annual pro se filings in the country periodically conducts a study and issues a report detailing its filing statistics. The most recent report showed that less than half of the debtors who filed a Chapter 7 bankruptcy petition without any “disclosed assistance” (meaning these individuals either had no help preparing their bankruptcy petitions or refused to disclose that any non-attorneys helped them) received a discharge in their Chapter 7 cases. You have better odds of correctly predicting the outcome of a coin toss. On the other hand, 93.9% of the debtors represented by an attorney in their Chapter 7 cases received a discharge.
Filing a Chapter 13 Bankruptcy Without an Attorney
Chapter 13 Bankruptcy cases, also known in some areas as “debtor’s court,” are generally more complex than Chapter 7 cases. Chapter 13 Bankruptcy plans involve more preparation, ongoing maintenance, and take from 3 to 5 years to complete before the debtor can receive a discharge. Even many attorneys who represent clients in Chapter 7 Bankruptcies shy away from taking on Chapter 13 Bankruptcy clients.
If you thought the statistics for pro se Chapter 7 cases looked bad, then you might want to sit down. A study published by the American Bankruptcy Institute Journal found that only about 2 in every 100 pro se Chapter 13 cases reached the finish line and received a discharge. The same study found that adding an attorney to the mix increased the odds of a debtor receiving a discharge by about 39 percent in a Chapter 13 case.
If you live in the South, those numbers are even more important. As of late March 2020, more than half of the bankruptcy petitions filed in the Southern states of Alabama, Mississippi, and Tennessee were filed under the Bankruptcy Code’s Chapter 13.
Why do Pro Se Bankruptcy Cases Go Wrong?
Pro se bankruptcy cases often fail for the same reasons most people wouldn’t dream of performing pro se surgery or even giving themselves pro se haircuts—time and skill. There are a multitude of factors to consider, even more opportunities to make mistakes—some with very serious consequences, and too much time involved in gaining even a basic familiarity on where to even begin.
Just a few examples of obstacles for pro se bankruptcy filers include:
- Laws and Rules. Although bankruptcies are filed in federal court, state rules—especially for exemptions—can apply in place of some of the default federal rules; they can also vary wildly from state to state. Additionally, there may be local court rules and form requirements to consider.
- Math. How good are you with numbers? From Means Tests and budgets to calculating deadlines and statutes of limitations, there is plenty of math involved in filing even a “simple” bankruptcy.
- Misinformation. One of the most common questions I hear is “can I leave that item out of the bankruptcy?” Omitting information about debts or assets could result in your case being dismissed, a forfeiture of assets, the inability to discharge a debt, or even federal prison time.
- Pleadings and Litigation. Even if you successfully file your petition, you’re still not quite home free. Unsurprisingly, some creditors don’t believe their debts should be forgiven, and those creditors may file objections to their proposed bankruptcy treatment. Being unprepared to respond to creditor objections, file appropriate court motions, provide supplemental information to the bankruptcy trustee, or litigate adversary proceedings can lead to serious adverse outcomes.
- Audits. Yes, even if you make it through all the above, there’s also a possibility for your case to be randomly chosen for an audit.
These are just some of the possible issues you might face if you are considering filing a bankruptcy petition pro se. As the statistics above illustrate, there is a significantly higher risk of an unfavorable outcome if you attempt to file your own bankruptcy petition without any help. Even if you’re feeling lucky, it might be worth considering the extra stress you’d be adding to your plate.
Give yourself the best chance to get the full benefit of your bankruptcy filing. Talk to a knowledgeable advocate before you make any decisions about how best to proceed. At Bond & Botes, we know that reclaiming control of your financial life can be daunting, and we want to make sure you’re armed with the information you need to make the right decision for you and your family. That’s why we offer free, no-obligation consultations to people who are considering bankruptcy in Alabama, Tennessee and Mississippi.