Filing Bankruptcy Without a Lawyer, Pitfalls for Pro Se Filers, Part 3

Beware of Pitfalls for the Pro Se Bankruptcy Filer. Getty Images

In Filing Bankruptcy WIthout an Attorney, Pitfalls for the Pro Se Filer, Part 1, we concentrated on determining whether bankruptcy is even the right course of action for you, what type of bankruptcy to file and the forms you will need to get the case properly filed.

Here are more considerations you will need to address:

Choosing Exemptions

Many attorneys will tell you that this is the biggest pitfall of all.

If you get this one wrong, you could lose valuable property.

Your first challenge is to choose the correct exemption scheme. In some states, this is not an issue. You have one set of exemptions. But in other states, you can choose either the exemptions written into the federal bankruptcy law itself or exemptions defined by your state.

Choosing Between State and Federal Bankruptcy Exemptions

Beyond that, look out for these additional issues:

List All Your Assets

List everything you own. Depending on the jurisdiction, you will not necessarily have to get extremely specific. For instance, it might be acceptable to list “Linens” instead of “Two sets of queen sheets, two sets of twin sheets, 6 bath towels, 6 hand towels, 10 wash clothes.” Likewise, it is usually not necessary to inventory your clothing.

Setting reasonable values for your property. Honestly, when I give my clients an assignment to list their property and add values, they almost always assign values that are too high.

The value you list on your bankruptcy schedules could be described as replacement value or as I like to call it, garage sale value.It is not what you spent for it when you purchased is new. Routinely, we will suggest that a person’s entire wardrobe might be worth $300 to $500, and their living room suite might be worth $250.


Getting Your Credit Counseling and Debtor Education Requirements

Many people fail to understand that these are two separate requirements.

First, you must take a credit counseling class before you file. You will receive a certificate for successfully completing it. It must be filed with your bankruptcy case.

After you file, you must take a debtor education course.

Both of these can be taken online, over the phone or in person.

Handling Reaffirmation Agreements, Motions for Relief From Stay and Adversary Actions

Reaffirmation Agreements are used in Chapter 7 cases to reaffirm a debt, usually tO keep a car or other collateral in exchange for continuing to make payments on it. If you want to sign a reaffirmation agreement without the advice of an attorney, you will have to go before the judge and testify in court to the judge’s satisfaction that you can afford the payments.

Motions for Relief From Stay are common in Chapter 13 cases when a debtor fails to make payments on secured debt like home mortgages and car loans.

Adversary Actions are lawsuits within the bankruptcy case that are used by debtors and creditors when the court needs to determine if particular debts will be discharged.  

If you find yourself on the receiving end of either a Motion or an Adversary, you will find representing yourself in either one extremely challenging.

It is almost guaranteed that if you ever get up for the judge, she will most certainly strongly advise you to get an attorney to help you. Neither one of those is something you want to go at alone. In fact, most attorneys will not handle them unless they regularly practice in bankruptcy court.

Get Help When You Need It

If all this sounds daunting to you, it should. Filing bankruptcy on your own is not for the feint of heart. It takes study, diligence, fortitude and a healthy respect for the system. It also takes a willingness to throw in the towel if the going gets rough. If you find that you are faced with issues you do not know how to handle, or if the trustee or judge strongly encourages you to seek advice from a qualified bankruptcy attorney, DO IT. They are looking out for your best interests.

They want you to complete your case successfully. If they believe it is time to seek help, that should be sign that you are in over your head.

Check out these articles:

How to Find a Consumer Bankruptcy Attorney

On finding the money to hire an attorney:

Too Broke to File Bankruptcy?

Too Broke to File Bankruptcy?, Part 2

For more things to think about if you are considering filing bankruptcy on your own, see

Filing Bankruptcy Without a Lawyer: Can or Should You?

Filing Bankruptcy Without a Lawyer: Pitfalls for Pro Se Filers, Part 1

Filing Bankruptcy Without a Lawyer: Pitfalls for Pro Se Filers, Part 2

Filing Bankruptcy Without a Lawyer: Chapter 13 Issues

Filing Bankruptcy Without a Lawyer: Resources for the Pro Se Filer