By Timothy Douglass
Trying to do your own bankruptcy could cost you thousands of dollars more than if you hired an attorney to prepare it for you. For someone considering bankruptcy, it is tempting to do your own bankruptcy. After all, most people in need of a bankruptcy have little money available to pay an attorney. A quick search of the internet can provide forms to prepare a petition. You just fill out the forms, pay the filing, show up for your hearing, and all your debts go away. Right? Wrong.
The most popular of the consumer bankruptcies is the Chapter 7. This type of bankruptcy is popular because in theory you are not going to pay anything back to your creditors. However, Chapter 7 bankruptcy is also known as “liquidation”. This is because a person is appointed by the bankruptcy court to take your property, sell your property, and pay the money to your creditors. This person is called the trustee, and if you do not protect your property from the trustee he will take your property to give it to your creditors. Also if you try to hide the property from the trustee, he can keep you from receiving the order that relieves you of your debt, and in extreme cases, your attempts may also expose you to criminal charges.
If you are thinking “I have no property”, you are likely wrong. Property is not just houses and land. It includes cash, bank accounts, retirement accounts, cars, clothing, jewelry, household goods, furniture, and even pets. It would also include things that you expect to receive in the future such as personal injury and workman's compensation claims, spousal support, social security or disability, bonuses, inheritance, even your anticipated tax returns. All of these can be taken by the trustee to raise money for your creditors. There are ways to protect your property, but if you fail to do what is necessary to protect this property, you have no choice but to turn it over to the trustee to be sold. Let’s say for example that you have $200.00 in your bank account, a car worth $1,500.00, a retirement account with $2,000.00 and you are anticipating a tax return of $2,500.00. If the proper documents are not filed in a timely fashion then the Trustee would be able to take all of these assets from you. If you do not properly protect these assets, your DIY bankruptcy just cost you $5,200.00. Typical attorney’s fees for a bankruptcy are between $1,000.00 and $1,500.00 so hiring an attorney in the above scenario would saved you between $3,700.00 and $4,200.00.
Additionally, bankruptcy can be very stressful and time consuming. If you have an attorney, he will be with you throughout the process to give guidance and encouragement and to help relieve the stress and concern that is inherent in any legal proceeding. The experienced attorneys at John W. Lee, P.C. stand ready to protect you from the dangerous pitfalls and unnecessary expenses associated with the DIY bankruptcy.
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