7 Common Mistakes People Make When Trying to File Bankruptcy on Their Own

It’s just a fact. The vast majority of people who try to file for bankruptcy on their own (or pro se) don’t manage to achieve a successful bankruptcy discharge.

Many go on to see their cases dismissed. Some end up facing far more serious consequences.

The reason could be because they make any, or in some cases all, of the mistakes outlined below.

#1) Filing the wrong paperwork, or doing the paperwork incorrectly.

Bankruptcy forms are confusing documents to deal with. Pro se filers attempting to fill out bankruptcy schedules face 42 pages of complex instructions.

Then there’s all the obligations involved with bankruptcy, and the documents you have to file to prove you’ve met them.

Fail to file even one, make a mistake on even one, and you could be setting your case up for failure.

#2) Forgetting to declare all debts.

Bankruptcy requires you to disclose every debt you owe. If you fail to do this you can create some serious problems for yourself. This even includes debts owed to family members, or friends.

While it’s possible to fix the problem if you forgot a debt in good faith, doing so opens you up to accusations that you’re giving certain creditors preferential treatment. Fixing the problem after the fact means even more paperwork, which in turn means more chances to get something wrong.

#3) Forgetting or failing to declare all assets.

Even if hiding a certain asset is an honest mistake, it can still open a door for criminal consequences.

Hiding assets is a form of bankruptcy fraud. Because bankruptcy cases are federal cases, bankruptcy fraud is a federal crime. The wrong mistake could mean spending up to 5 years in prison and being assessed a $25,000 fine which, of course, may not be discharged in any future bankruptcy case.

See also: 6 Things to Get Together Before Filing for Bankruptcy.

#4) Misunderstanding exemptions.

Certain property is exempt in a bankruptcy case. Some isn’t.

If you’re trying to use bankruptcy to save a house or car you need to be very familiar with these exemptions, because in a Chapter 7 case they can determine whether your property is auctioned off or not.

You probably won’t lose personal property, but personal property is rarely the only thing you’re trying to protect. One misstep could mean a nasty surprise which leaves you without a place to live, or a way to get to work.

#5) Misunderstanding what you can and can’t do before and during bankruptcy.

Can you make that big purchase 6 months before your bankruptcy? Can you pay off Mom 90 days before your bankruptcy? Do you even know?

There are parts of your life which will be scrutinized after a bankruptcy case is filed. If you’re not intimately familiar with all of them you can, again, open yourself up to a dismissal, or an accusation of bankruptcy fraud.

#6) Choosing the wrong type of bankruptcy.

Choosing the right type of bankruptcy isn’t as straightforward as it looks. Much depends on your goals, your assets, your exemptions, and your eligibility. Misunderstand any of these points and you could end up filing a type of bankruptcy which won’t serve you and which will not be successful.

We go through an entire process before we recommend a Chapter to you. We evaluate your assets, debts, and goals. You wouldn’t be the first type of client to come in expecting and wanting to file one Chapter only for us to have to tell you that you really want and need the other.

#7) Believing creditors will never push back.

Creditors can and do scrutinize your actions before and during your bankruptcy case, especially in Chapter 7 cases where they stand to lose a lot of money. They notice mistakes you don’t even know you’re making. If the amount you owe them is substantial enough they may challenge your discharge.

It doesn’t happen often, but it certainly happens more often in pro se cases than it does when a qualified attorney is protecting the debtor’s interests.

If the creditor is successful you won’t receive a discharge, either for that debt or for all of them. You’ll still owe the debt, and your creditors may become more aggressive than ever.

With a lawyer’s help, Chapter 7 bankruptcies are successful 99% of the time. Without a lawyer’s help the number drops to 69%. Meanwhile, Chapter 13 cases without lawyers are successful less than 1% of the time.

See also: 9 Risk Factors that Might Make a Creditor Challenge Your Bankruptcy.

Embrace the alternative!

These all serve as reasons why USCourts.gov strongly recommends getting a bankruptcy attorney.

But don’t worry. Getting an attorney is easier and more affordable than you think, at least at Sadek & Cooper. We offer free consultations and reasonable payment plans to ensure no client ever has to risk big bankruptcy problems because they fear bankruptcy legal fees.

Why not make your initial appointment with us today? We’re available 24 hours a day, 7 days a week so you can get the help you need.

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