This morning, I received an email from a gentleman named Jim, who writes:
How can I file chapter 7 by myself without paying someone, anyone $ 99.00 $199.00, $299.00 etc… Three different people( with a financial intrest of course) said representation is required.
Here is my response: Jim, you certainly have the right to file a Chapter 7 case by yourself. The forms are available either on-line or at an office supply store. There are also several books about how to do this. I am currently reviewing a book entitled The Complete Chapter 7 Personal Bankruptcy Guide by attorney Edward Haman that is published by Sphinx Publishing that is quite comprehensive.
Here are the issues:
1. the bankruptcy process has become significantly more complicated since October, 2005, when the BAPCPA changes to the bankruptcy laws were enacted. I know a number of lawyers who used to file the occasional Chapter 7 here in Atlanta, but who have now given up the practice because of the complications. In particular, you need to fully understand how the median income test and the means test works – if you do the calculations incorrectly, you could end up in a deposition at the United State’s trustee’s office, face a motion to dismiss or face a motion to convert to Chapter 13.
2. you need to understand about the pre-filing credit counseling requirement as well as the pre-discharge financial management course requirement
3. in order to actually file your case, you will need to go to the Clerk of Bankruptcy Court and scan your pages to get your case filed. I suspect that this process is not particularly complicated, but I have not used the scanning equipment at the Clerk’s office.
4. you cannot dismiss a Chapter 7 voluntarily if you change your mind. For example, if you file, but it turns out that you earn too much or own too many assets the judge may not let you out of your case, at least until after your assets are liquidated.
5. you need to understand how the Georgia exemption law works and how it applies in Chapter 7 to protect property that the law allows you to protect. If you don’t properly declare property as exempt even if the law would otherwise allow you to protect it, then you could lose your property anyway.
6. do not expect to receive advice from the Chapter 7 trustees or the U.S. Trustees. Their interest is to maximize the recovery of the estate (i.e. your creditors).
While folks contemplating bankruptcy obviously do not have a lot of money, I think that in most situations the complexity (which, no doubt is unnecessarily complex) makes a pro se filing a mistake.