A medical issue, divorce, unemployment, or other problem can leave you broke and struggling to get out of debt. Without much money, you could be tempted to file for bankruptcy on your own.
Be warned, though, that filing bankruptcy “pro se”, or without an attorney, can be a waste of time and money. It’s easy to make mistakes during the difficult and stressful bankruptcy process, especially if you haven’t gone through it before.
In this article, we discuss common mistakes made when filing bankruptcy on your own. To learn how an experienced North Charleston bankruptcy attorney can help you avoid these mistakes, contact Steadman Law Firm, P.A. today.
Know What You’re Getting Into
If you file for bankruptcy on your own, you are solely responsible for managing your claim. This means that you alone must stay on top of all the bankruptcy forms, hearings, and responsibilities. Obviously, you need to fully understand federal and state laws and procedures. But you also need to make a huge investment of time and energy.
6 Common Mistakes When Filing Bankruptcy on Your Own
Bankruptcy involves making difficult decisions with long-term consequences, especially if you make a mistake. Unfortunately, mistakes are commonplace for bankruptcy pro se filers. Here are six common mistakes you could avoid by hiring an experienced North Charleston bankruptcy attorney.
#1: Filing for Bankruptcy When It’s Not the Best Option
Bankruptcy doesn’t work for everyone. “Non-dischargeable” debts can’t be eliminated through bankruptcy. The court can sell “non-exempt” property to pay off some of your debt. So, if you have a lot of non-dischargeable debt and non-exempt property you’d like to keep, don’t file for bankruptcy. If you do, you could unnecessarily put your assets at risk and still end up in debt.
#2: Filing Erroneously for Chapter 7 or Chapter 13
A common mistake for pro se bankruptcy filers is filing for the wrong chapter. Chapter 7 bankruptcy might be attractive because it is quicker than Chapter 13 and eliminates debt. However, you’re wasting time and money if you file for Chapter 7 and your income doesn’t qualify you for it. Chapter 7 works if the cost of having your “non-exempt” property sold is worth the benefit of eliminating your debt. Chapter 13 works if you are fine with a longer process and reducing your debt under a repayment plan. It’s a waste of time and effort if you don’t have enough income to make payments under a plan.
#3: Not Completing Counseling and Education Requirements
Discharging your debt through bankruptcy requires that you receive credit counseling and financial education courses. If you don’t complete these requirements, the court is likely to dismiss your case or not issue the discharge.
#4: Not Following Court Rules and Procedures
Bankruptcy involves completing legal paperwork for the court. Every bankruptcy court has its own set of rules and procedures you must follow. A proper filing includes the correct forms that have been completed the way the court requires. It could also include providing a petition, statement of finances, and supporting documents such as pay stubs and tax returns. Not following the rules and procedures of your local bankruptcy court will cause your case to be delayed or even dismissed.
#5: Not Taking Full Advantage of Exemptions
You can use exemptions to keep property from being sold in a Chapter 7 bankruptcy. They can also be used to reduce the amount you pay to certain creditors in a Chapter 13 bankruptcy. You risk losing assets unnecessarily if you file bankruptcy on your own without knowing everything you can exempt.
#6: Missing Your Meeting of Creditors
The court will set the date, time, and location of your meeting of creditors (also known as a 341 hearing). At the meeting, you must answer questions about your finances that the court, trustee, and any creditors ask. You risk getting your bankruptcy case dismissed if you fail to attend.
Talk to a North Charleston Bankruptcy Attorney Today
Before deciding to file bankruptcy, be sure to first talk to a legal professional. An experienced bankruptcy attorney can help you determine whether filing bankruptcy pro se is worth your time and money. At Steadman Law Firm, P.A., we can guide you through your decision and help you get out of debt. Contact us today to learn more.