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Why Filing For Bankruptcy Should NEVER Be A DIY Project

Filing for bankruptcy is not an easy decision; many people in debt will struggle for months, or even years, before turning to bankruptcy as a plausible option. If you’ve decided to file, you may be thinking about filing on your own (known as filing pro se); after all, you’re in financial trouble, which is why you’re Filing for bankruptcy in the first place. How can you afford an attorney when you can’t afford to pay your monthly bills?

While the process of filing for bankruptcy is regulated by the federal Bankruptcy Court, it’s not exactly easy or user-friendly. There are numerous forms to fill out as well as many important points to consider. People who don’t hire attorneys may end up losing assets they could have kept, or paying more than they really needed to, simply because they’re not as well-versed in bankruptcy law as an attorney who has had years of experience. If you’re thinking about DIYing your bankruptcy, consider the following possible pitfalls:

  1. You may not even need to file for bankruptcy.

    When you’re underwater in debt, you may think that bankruptcy is your only hope for becoming debt-free. However, not everyone needs to file for bankruptcy; there are alternatives to help you manage your bills, such as credit counseling or other debt consolidation companies. Before you file for bankruptcy and take a hit on your credit report, you should speak to a bankruptcy attorney who can go over your bills, your income, and discuss which option is best for you.

  2. You may not fill the correct documents.

    A bankruptcy application is broken down into numerous forms that you will need to fill out and you will also need to provide financial documents along with these forms. The Bankruptcy Court advises that you be familiar with the United States Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and the local laws of the court where you plan to file. For the average person, this is a lot of information to absorb, and you may not really have the time to devote to it. A bankruptcy attorney, however, is already familiar with both the federal and local laws, and will know exactly what forms and documents you need to provide. Your attorney will tell you what to provide and can fill out the rest of your paperwork in a timely manner.

  3. You may not know which bankruptcy chapter is best for you.

    Do you understand the difference between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy? Do you know which one is most beneficial to you? Picking the wrong chapter can lead to losing more assets than necessary, or even having your case thrown out of court. When you’re filing for bankruptcy, you can’t afford to make these mistakes. Speak to a bankruptcy attorney about your financial situation, who should be knowledgeable about each plan to help you choose which one is your best fit.

  4. You may not know what exemptions you’re eligible for.

    Many states offer exemptions in bankruptcy that permit you to keep some of your assets. Ohio has exemptions for your home, car, and retirement accounts, to name a few. If you’re not familiar with exemptions and how to apply them to your situation, you can be in danger of losing assets that you should have been able to keep. Your bankruptcy attorney will be able to go over your list of assets and determine what you may keep under the exemptions rule.

  5. You may not know what debts can and cannot be discharged.

    You may have several different types of debts: some secure, some unsecured, and some that are priority or non-priority. However your debt is assessed by the bankruptcy court will determine which ones can be discharged and which ones you will still be responsible for paying. Let your bankruptcy attorney explain each type of debt and give you a clear picture of what debts you will or will not owe after your bankruptcy discharge is awarded.

  6. You might want legal advice.

    If you decide to go it alone in bankruptcy court, you may find yourself wishing that you had somebody you could turn to for just a little advice. Unfortunately, when you file pro se, you don’t have this option. Neither the court nor the judge presiding over your case may offer you advice. You can elect to have help preparing your application by a non-legal petition preparer. However, this person is only permitted to enter the information you provide onto your bankruptcy petition and cannot give any advice, either. The only person who can give you legal advice on your bankruptcy case is a bankruptcy attorney.

  7. You may not know the tax consequences of filing for bankruptcy.

    Your bankruptcy discharge has been awarded: now what? What happens during tax season? If you hire a capable bankruptcy attorney, you will not need to also hire a tax professional because your attorney can go over what forms you may need to prepare at tax time, and whether or not you’ll get a tax refund after your bankruptcy.

It’s Best To Contact An Experienced Bankruptcy Attorney

Before deciding to DIY your bankruptcy, you should speak to a bankruptcy attorney. The attorneys at Cleveland Bankruptcy Attorneys have years of experience with many bankruptcy cases and can educate you so that you make the best decision. For a free consultation with one of our seasoned attorneys, call (216) 586-6600 or email us at advice@clevelandbankruptcyattorney.com.

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