Revisiting an area we’ve already discussed, you may still be debating whether filing Chapter 7 yourself is the right option. It’s still best to work with an attorney, but if you decide to attempt to file on your own, you should be aware of the most common mistakes that jeopardize self filed bankruptcies. Here are seven pitfalls to avoid if you attempt to file chapter 7 on your own.
1. Filing for bankruptcy before the time is right
Before you file for bankruptcy, it’s important to review all of your options. Once you have a comprehensive understanding of your options, you’ll be able to make an informed decision about whether bankruptcy is right for you.
2. Filing with the wrong chapter
Most people use Chapter 7 bankruptcy or Chapter 13 bankruptcy when they file. However there are critical differences between the two. Chapter 13 is best, for example, if you’re trying to save your house from foreclosure. Chapter 7 is better if you have no assets or a low income. Picking the wrong one could lead to losing property you may have been able to save or not being able to discharge particular debts. It’s also possible you may not qualify to file for one or the other.
3. Failing to include required documents
If you choose to file bankruptcy without a lawyer, the responsibility of submitting all the necessary documents is on you. It’s easy to miss local forms and adhere to local rules. It’s a good idea to visit your local bankruptcy court’s website to determine what’s required.
4. Selecting the incorrect property exemptions
Chapter 7 and Chapter 13 both include different property exemptions. These are often key. Make sure you have up to date information on what you can include as an exemption, as the rules periodically change. There are also a number of complexities that arise when you own joint property. In addition, you may run into difficulty if you’re not sure how to list a property or don’t know the equity on your property. A visit to an attorney in this case may save you valuable heirlooms and potentially your car or your home.
5. Failing to complete required credit counseling courses
Both Chapter 7 and Chapter 13 bankruptcy require you to attend a credit counseling session with a provider from an approved list before you can file or take a class on financial management before you are discharged. If you fail to file the correct certificate or fulfill these requirements, your petition can be dismissed.
6. Not being able to defend against adversary actions
In most cases with a Chapter 7 case, after you file for bankruptcy, you attend a meeting of creditors and hopefully get a discharge. But in some cases, a trustee may claim you’ve committed fraud or a creditor can challenge a debt’s dischargability. In order to be successful in these cases, an attorney may be needed.
7. Not getting help when you need it
Even if you are trying to file bankruptcy without an attorney, it’s important to recognize when it’s time to get help. If the cost of hiring an attorney is a concern, consider weighing it against the cost of your debt or lost property should you lose your case.
Need help with your bankruptcy case? Contact DeLuca & Associates at (702) 252-4673 to schedule a free consultation.