By John Lee
Do You HAVE to Have a Lawyer to File Bankruptcy?
Often times I am asked if a person can file their own bankruptcy without an attorney. I respond with: Of course, and you can perform your own brain surgery too. Any idiot can crack open their own head and start swirling their brains around, it does not mean you are going to get the same result as a trained brain surgeon.
Bankruptcy is very complicated and it is easy to make a mistake and have your case dismissed, your assets seized and criminally prosecuted for bankruptcy fraud. Recently, in the news, we have seen celebrities receive prison time for leaving assets off their bankruptcy schedules. If the schedules are not filled out properly you can have any number of assets taken by the Bankruptcy Trustee, including, tax refund, bank accounts, cash, life insurance polices, automobiles, inheritance, personal injury settlements and even your home. If the Court determines that you intentionally left off an asset or omitted a recent transaction, you could be prosecuted for perjury or fraud.
The Trustee is assigned by the bankruptcy court to review your case to determine if there are any assets he can take from you to sell for the benefit of your creditors. He is paid a commission based on the amount of assets he takes; therefore he is highly motivated to find all the assets he can. Many people think they do not have any assets, but that is not normally the case. Are you expecting a tax refund next year? Do you have money in a bank account? Do you have a car? Do you have a life insurance policy? If not properly protected by an attorney, the Trustee can seize these assets. In many cases, there is a deadline for you to properly claim your exemptions, and if you fail to do so, then you can not go back and amend.
There are certain exemptions that are available to the debtor, but must be claimed in a timely manner. If the debtor does not properly claim the exemption he loses the asset. I have seen debtor’s lose valuable property such as large tax refunds simply because they did not file the paperwork in a timely manner. In this case, the debtor lost over $5,000.00 in tax refund money because she saved $1,000.00 in attorney’s fees. Imagine that: losing a $5,000.00 tax refund because you were saving $1,000.00 in attorney’s fees.
Other Than Potential Loss of Assets, What Are the Risks?
The risk in Do-It-Yourself bankruptcy does not end with the loss of assets. Many people are put in prison each year for bankruptcy fraud. The bankruptcy petition is signed under the penalty of perjury. If you answer a question falsely, it could be considered perjury and you could get up to five years in prison. Some of the questions are not easy to understand and you need an attorney to help you determine the correct answer. There are a number of Questions on the Statement of Financial Affairs that are complicated and most debtors do not understand. These questions are designed to help the trustee determine if there are undisclosed assets that he can go after. Many people do not understand that that the Trustee can undo transactions (sales and gifts) the debtor has made in the last several years.
The Bankruptcy Code requires certain documents to be provided to the Trustee by certain deadlines. If the documents are not provided within the acceptable time frame then the Trustee has the right to dismiss your case. You may be able to hire an attorney to file another bankruptcy, but in some cases you may be barred from filing a subsequent bankruptcy.
The Bankruptcy Code allows a non-attorney to type your bankruptcy petition for you. However, that non-attorney is not allowed to give you any legal advice, particularly regarding the exemptions that protect your assets and tax refund. That means, if you hire a petition preparer, that person is not allowed to assist you in protecting your home, car, accounts, life insurance or tax refund. Also, the petition preparer is not there to help you at the 341 Meeting of Creditors where the Trustee is trying to determine if you have any assets he can seize. If the petition preparer messes up your schedules, it is you standing before the Judge, the petition preparer will not be standing next to you. When you hire an experienced bankruptcy lawyer he will stand by your side until the case is finished.
Many people who decide on a Do-It-Yourself bankruptcy wish they had used an attorney after their tax refund and other assets are seized; or their case gets dismissed for not filing a document in a timely fashion. But it does not have to be this way; the Attorneys at John W. Lee, P.C. offer a free initial consultation to discuss your bankruptcy options. If you decide that bankruptcy is for you we offer several payment plan options.
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