This article is for informational purposes only and should not be construed as legal or financial advice. If you need legal advice, you can contact a bankruptcy attorney.
This article explains a simple step-by-step process for filing for bankruptcy without an attorney, as the United States Bankruptcy Code does not require people to hire a bankruptcy lawyer to file a bankruptcy case
1. Bankruptcy is a form-based. Decide to Use Online Software vs Fill Out Forms
Bankruptcy is form-based, meaning that you will fill out forms and then submit them to the court to start your case.
The bankruptcy forms are complex, and there are many required forms, so the first step is to decide whether to use online DIY bankruptcy software to file. Let's compare the options.
A) Online Software
Here are some things to consider when using bankruptcy software.
Online Software automatically pulls credit and adds data into the forms
It can be expensive to pull a credit report and then manually upload that data into your bankruptcy forms
Fresh Start Finance allows you to do a soft credit report pull (does not affect your credit) and will enable you to automatically upload the data into the credit report.
Online Software understands what forms to fill out
A software such as Fresh Start Finance asks questions and then shows what forms you would fill out to complete your bankruptcy.
Thus, it saves you time because you don't have to sift through a trove of forms.
Online Software estimates if you qualify for bankruptcy
You generally have to qualify for Chapter 7 bankruptcy (most common) by passing what's called the means test. An online software helps you estimate whether you qualify for the Chapter 7 bankruptcy.
Online Software provides automated case updates
When you file bankruptcy, you will get updates from the court such as trustee's requests for documents or the 341 meeting.
An online software can provide you automated updates to track the progress of your case, making sure you stay on top of everything.
Online Software provides a free rebuilding portal
When you file for bankruptcy, your credit score and report will be impacted. Online bankruptcy software provides ways to rebuild your credit after you are forgiven your debt.
Best of all, you can get started with the online software for free to make sure the products work for you, and the short questionnaire below shows whether your used case works with the software.
B) Filling Out Forms Manually
Here are some of the difficult things about filling out the forms manually.
Knowing Which Forms To Fill Out
A typical case can be 10- 20+ bankruptcy forms, resulting in 50+ pages, and you have to sift through the forms to understand which ones to use. For example, one of the most challenging thing that I had to solve when figuring out how to write this article was things like how to fill out the creditor filing matrix, and how to handle more complex used cases. Here's an
example bankruptcy form that you would have to fill out.
This example Schedule E/F: Creditors Who Have Unsecured Claims is just 6 pages long, but it reads as if the author crammed 20 pages of material into 6 pages.
Pulling Credit Report to Fill Out Your Creditors
If you have 1-2 creditors, it may be easy to add those creditors directly to your forms. If you have many creditors, it can be difficult to actually find all those creditors and fill all those details out.
Let's next discuss gathering information and documents.
2. Gather Information and Documents
Before completing your bankruptcy forms, you need to gather information regarding your debts, assets, income, and expenses.
The first thing to do is get
free copies of your credit reports from all three credit reporting agencies (Equifax, Transunion, and Experian), courtesy of the US government.
I like this option instead of having to pay for expensive credit reports, and it's something you can pull once each year for free.
In addition to your credit reports, you need copies of:
- Tax returns for the past two years
- Current pay stubs and proof of income from all sources for the past six months
- Recent credit card bills, loan statements, and any other evidence of the debts you owe
- Statements for your checking account, savings accounts, retirement accounts, stock accounts, and all other financial accounts that you have an interest in at the time of filing
- Titles and/or registrations for all motor vehicles titled in your name alone or with another person
- Current household expenses include utility bills, lease payments, rent, etc.
- Real estate appraisals and deeds to property (if applicable)
- Any other documents that relate to your income, expenses, debts, and assets (if applicable)
3. Complete the Chapter 7 Means Test
Before going any further, complete the Chapter 7 Means Test using applicable
means test forms. Our software fills out the applicable forms for you as you don't always have to do each of the 3 forms.
The Means Test determines if you meet
your state's income requirements based on your household size for a bankruptcy discharge, which is the goal of bankruptcy. Discharge removes your legal responsibility to repay a debt. Chapter 7 is intended for individuals who do not have enough money to repay their debts after paying their living expenses.
4. Complete Your Credit Counseling Course
If you “pass” the Chapter 7 Means Test, complete your credit counseling course.
The credit counseling course is the first of two bankruptcy courses required to file bankruptcy without an attorney and obtain a bankruptcy discharge.
Credit counseling courses are offered online by many approved companies.
The fees range from $10 to $50. The
UST provides a list of approved Credit Counseling and Debtor Education courses on its website. I personally scoured the list and found one that I thought was affordable and user friendly.
You must use a company approved by the UST for bankruptcy courses.
5. Complete Your Chapter 7 Bankruptcy Forms
Your Chapter 7 bankruptcy forms consist of roughly 24 forms, but the number of forms may be dependent on how you answer certain questions. Because it's dependent, your bankruptcy forms could number 70 or more pages.
You can access the official bankruptcy forms online through the
United States Court website. The Fresh Start Finance filing software has specific forms based on your answers to questions, so it takes away some of the guesswork and saves time.
6. File Your Bankruptcy Forms with the Bankruptcy Court and Pay the Filing Fee
Print your bankruptcy forms. They must be printed on one side of the paper. Review each page for errors and mistakes. If the forms are correct, sign the forms in all places indicating a signature.
Most courts only accept cash or money orders, so check with the court before filing your forms. I spoke to someone recently who did not have cash or a money order, and it was challenging to find a place that provided him one.
7. Mail Required Forms to the Chapter 7 Trustee
Each Chapter 7 trustee has a different process for obtaining documents for court.
Check with your trustee’s office for the document list you must send to the trustee’s office before your 341 Meeting of Creditors.
In addition, some trustees have websites that explain their procedures, and some trustees might email you what forms you need to send if there are deficiencies in your filing.
8. Complete Your Debtor Education Course
Most companies that offer Credit Counseling Courses also offer the debtor education Courses.
Complete the second bankruptcy course as soon as possible and file the certificate of completion with the bankruptcy court.
There are so many credit counseling and debt education courses, so I spent a lot of time figuring out one that I thought was inexpensive and user-friendly.
9. Attend the 341 First Meeting of Creditors
The 341 First Meeting of Creditors is held 30 to 45 days after filing your bankruptcy case. The Chapter 7 trustee conducts the hearing.
You must have your original driver’s license and Social Security Card with you at the hearing.
If you do not have these documents, contact the Chapter 7 trustee’s office immediately to ask what other documents would be acceptable, if any.
I have spoken with many people who are nervous and scared about this meeting, thinking that their creditors will show up. I have listened in many of these meetings and have never heard of a creditor showing up. It's generally a standard list of questions, and if you are honest, you may have no trouble at all.
10. Deal with Your Car Loan
Secured debts (i.e., car loans and mortgages) are not discharged.
Instead, you must continue paying these debts or surrender the property.
A vehicle is a common asset that most people request more information. Many people who want to keep their vehicle may sign a
reaffirmation agreement if they would like to keep the car and continue paying on the vehicle. This is the case for people who want to keep their vehicle even though money is owed on the car loan.
If you surrender the property through Chapter 7 bankruptcy, the creditors cannot demand any more money even if they do not receive enough money to pay the debt when they sell the asset.
Should You File for Bankruptcy Without a Lawyer?
The question of whether you should file without a bankruptcy attorney is one of the most important questions to consider. Cases filed by individuals without attorneys are referred to as “pro se” filings. However, the United States Court system strongly recommends seeking advice from a qualified attorney because bankruptcy issues can be complicated. Furthermore, filing a Chapter 7 bankruptcy case can have long-term consequences for your finances and other legal matters.
You may be strapped for cash and wondering how you would be able to afford the Chapter 7 attorney fees of $500 – $2500 in your area in addition to the $338 filing fee. Here are some options.
- Many bankruptcy attorneys take payments to cover the attorney fees over time.
- Some bankruptcy districts allow attorneys to take payments after filing for bankruptcy
- There may be other cheap options to file bankruptcy with an attorney.
Before You File Bankruptcy Without an Attorney
If you have any doubts, consider talking to a Chapter 7 bankruptcy lawyer for free. Most bankruptcy attorneys offer
free bankruptcy consultations.
You can get legal advice and discuss any problems that might arise in your case.
If you decide to file Chapter 7 without a lawyer, below is an overview of the basic steps to file Chapter 7 without a lawyer.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is often the cheapest and fastest option for debt relief, so this article covers that type of bankruptcy. Chapter 7 bankruptcy is US government-regulated and legal option to get forgiveness from certain debt. Some debtors exit Chapter 7 bankruptcy without any debts.
If your Chapter 7 case is simple, you may be able to file Chapter 7 without a lawyer. Please note that the bankruptcy trustee (i.e. overseer and manager of the bankruptcy) and court may still treat you the same way as they would if you had a lawyer.
The bankruptcy trustee and court cannot give you legal advice about your case or tell you what decisions to make. Therefore, you need to prepare to answer questions and handle matters that come in your case without their advice.
Important Considerations Before Filing Chapter 7 Without an Attorney
Filing for bankruptcy relief could be the best solution to your debt problems.
However, before you go down that path with the help of a bankruptcy lawyer, there are five essential things you need to consider
1. The Length and Complexity of Bankruptcy Forms and the Need for Accuracy
A completed bankruptcy package could contain 70 or more pages, depending on the case’s complexity.
Bankruptcy forms can be difficult to understand.
You must read each page and section carefully to ensure that you include the correct information requested.
2. Does Your Chapter 7 Case Have Complex Issues?
Filing Chapter 7 without an attorney may only be a good idea if your case does not involve any complex issues. Complex issues could include, but are not limited to:
- A home you want to keep, but you are behind on the mortgage payments
- You owe back child support or alimony payments
- If you are behind on your car payments but want to keep your car
- You owe back income taxes or other government debts
- Your debts include judgments regarding a DUI accident or fraud
- You have a large inheritance you just received or anticipate receiving soon
- Your income comes from a trust or other family arrangement
- Your spouse makes a lot of money and does not need to file for bankruptcy relief
- You have not filed tax returns for several years
- Potentially, you own assets that are worth more money than the allowed bankruptcy exemptions
- You paid family members money within the last year
- You sold or transferred anything of value within the past two years
Let me finish this article by providing pros and cons of using various people and companies to help you file Chapter 7 bankruptcy.
Pros and Cons of Getting Assistance
These pros and cons are sorted from potentially least expensive to most expensive.
1. Bankruptcy Filing Software (Least expensive)
Bankruptcy software makes it easier to complete your bankruptcy forms. It's often the cheapest option outside of filling out the forms yourself.
You enter information into the program, and the software completes the bankruptcy forms.
Well-developed bankruptcy software is easy-to-use, field-driven software that has updated bankruptcy forms and current information.
Some bankruptcy software is as easy to use as the credit counseling and debtor education systems used for bankruptcy courses.
The potential con of bankruptcy filing software is that you do not get legal advice and fill out the forms yourself.
2. Bankruptcy Petition Preparers
Some companies offer to prepare and file your bankruptcy case for you. These companies are often called “bankruptcy petition preparers” or BPPs. A BPP is someone who helps you fill out your bankruptcy forms.
Their role is limited to typing your bankruptcy forms from the information you provide.
They are not permitted to give legal advice. Only attorneys may give legal advice. A BPP does not represent the debtor in the bankruptcy case or court.
3. Bankruptcy Lawyer
Here are the pros:
- Bankruptcy attorneys have extensive knowledge of bankruptcy laws and requirements.
- A lawyer completes your bankruptcy forms accurately and fully, reducing the chance of a problem in your case.
- Your lawyer protects your property from being sold to pay unsecured creditors.
- An attorney handles your creditors for you and provides legal advice throughout the case.
- A bankruptcy lawyer represents you in court.
Here are the cons:
- Cost – Many people believe they cannot afford to hire a bankruptcy attorney. However, most bankruptcy lawyers charge reasonable fees and offer payment plans.
- You have to find someone that you trust and work well with
Summary
In many cases, filing Chapter 7 without an attorney can be difficult.
Contact me at Fresh Start Finance for more information about filing Chapter 7. I can explain more about the bankruptcy filing software, and if you want I can help get you connected with a bankruptcy attorney who offers
free bankruptcy consultations.
