The vast majority of bankruptcy filers in Oklahoma rely on the services of a bankruptcy attorney to pilot their filing through the maze of legal requirements. In the two bankruptcy courts serving the eastern parts of Oklahoma last year, more than 98 percent of all bankruptcy filers relied on the representation of an Oklahoma bankruptcy attorney.
Yet, it’s still possible to file Chapter 7 bankruptcy in Oklahoma without an attorney. The practice is somewhat more common in Western District of Oklahoma Bankruptcy Court. Further West, filing for bankruptcy without an attorney – or pro se – is even more common. Nearly one in 10 Colorado bankruptcy cases in the government’s fiscal year 2011 were filed without a lawyer. Pro se bankruptcy filings are most prevalent in central California. One in four bankruptcy filings there were filed without an attorney’s representation.
Those who file bankruptcy without an attorney often rely on various free online bankruptcy forms, do-it-yourself bankruptcy kits or bankruptcy paralegal services. Do-it-yourself bankruptcy kits may include references to U.S. bankruptcy laws, but they can’t provide legal advice. Nor can a paralegal offer legal advice.
As a bankruptcy attorney, I’m glad that so many Oklahomans see the folly of delving into a complex process without professional advice or experience. I think an attorney’s skilled counsel provides bankruptcy filers a greater level of personal confidence and financial security during a time when they are struggling with not only debt, but the emotional and social impact of insurmountable debt.
Yet, I know that in spite of my warning, there will still be those of you determined to file Chapter 7 pro se. For my Oklahoma neighbors who may consider filing Chapter 7 bankruptcy without an attorney, here’s an overview of the steps you’ll need to go through if you file Chapter 7 bankruptcy.
Decide Whether Chapter 7 or Chapter 13 is Best for You
Most bankruptcy filings in the U.S. are filed under either Chapter 7 or Chapter 13 bankruptcy laws. How do you know which is right for your situation? That usually requires careful comparison of Chapter 7 and Chapter 13 bankruptcy. A side-by-side comparison alone won’t be enough. You’ll need to review each form of bankruptcy in view of your income, debts, assets and other factors – including your own personal or financial goals.
Don’t skip this important step. You may be able to convert to a Chapter 13 if a court finds that allowing you to get a discharge under Chapter 7 would be an abuse of the system. Even when it is allowed, the process of converting to Chapter 13 can mean lost time, extra costs and continued stress. If you file Chapter 13 from the start, you might miss out on an opportunity to discharge more of your debt under Chapter 7.
Review Your Debts
Would Chapter 7 get you out from under all or most of your debt? Chapter 7 can erase most debts entirely. With other debts you will have to make some decisions as to whether to reaffirm and keep the property, or surrender property and discharge the debt. Taxes can be a testy subject when it comes to bankruptcy filing. The rule of thumb is tax debts are non-dischargeable, but a narrow exception may allow some tax debts to be discharged. Review your state and federal tax documents – and relevant tax law – to see if any tax debts can be discharged under Chapter 7 bankruptcy.
A recent credit report is vital at this stage. In the rush of creditors’ calls and personal stress over how to make ends meet with dwindling funds, you may have forgotten about some old debts. The creditors might not have forgotten. You also need to know about any judgments that remain outstanding, which can become liens that may be discharged or otherwise resolved through Chapter 7 bankruptcy.
Add Up All of Your Income and Living Expenses
You’ll have to pass a Chapter 7 means test to qualify for Chapter 7. This compares your household size to the state median income for your household size. To run the Means Test you will need your pay stubs for the six months prior to your filing. If you’re weighing Chapter 7 against Chapter 13 filing, the Means Test can tell you how long your payment plan may be under Chapter 13. The means test will use a combination of expenses allowed under IRS and state standard expense tables and some of your actual expenses to determine whether you still qualify for Chapter 7 if you do not presumptively qualify based on household size and income.
Failure to spend time on this tedious process can be costly. If your filing doesn’t comport with what the law allows, the bankruptcy trustee can move to dismiss your case as abusive.
Review your Executory Contracts and Unexpired Leases
You will need to list all of your open contracts and leases, listing them according to how you would like them to be handled. You can assume or reject certain contracts. Some contracts should also be listed in other schedules elsewhere in the bankruptcy filing, so don’t forget to list them in both places.
Go Over your Payment History
If you’ve been involved in a lawsuit, transferred assets, moved money between bank accounts or lost money (or value) on property, you’ll need to disclose this in your Chapter 7 filing. If you’ve recently paid down one debt at the expense of others, the bankruptcy trustee may consider that debt a preference, and attempt to recover some of those payments to be distributed among other creditors. Especially if you’ve paid debts to business partners and family members or such within the past few years prior to filing for bankruptcy, you might have preference issues.
Don’t Forget About Business Ownership
Even if you’ve moved on, you might still have interests in a corporation or a business venture. It’s essential to disclose these interests to the bankruptcy trustee. You will also need to be conversant with local bankruptcy court rules. Certain circumstances may also require that you do a little research into how bankruptcy law has been applied to similar circumstances by the Bankruptcy Court in your area.
Study Bankruptcy Law and Court Rules
You’ll need to be up to speed on Title 11 of the U.S. Bankruptcy Code. Local bankruptcy court rules in your district and case law established in the U.S. Circuit Court in your area can make a difference in how the local court interprets U.S. law.
Be Thorough in Preparing your Chapter 7 Filing
Try your best to get it right the first time. Make sure you have all of the necessary forms including those local forms that the Court in your jurisdiction may require. Then, go back and check them over several times. Review the law, review your circumstances then review what you’ve drafted while you have your documentation assembled for easy reference.
Check your math. Consider taking a break then having another look with fresh eyes at everything you’ve done. There are stiff penalties for knowingly making material misstatements. Mistakes or omissions on your part may be inadvertent, but the bankruptcy trustee might not see them that way.
Ask: Do I Still Want to File Chapter 7 Without A Lawyer?
Many Oklahoma Chapter 7 bankruptcy attorneys offer free consultations for those considering whether to retain legal counsel in a bankruptcy filing. Before you stuff your documents in an envelope for delivery to the bankruptcy court, ask yourself if you have any lingering doubts or questions about the case you’ve prepared. If you’ve done your homework, you may be in a better position to retain an affordable bankruptcy attorney. A qualified advocate on your side at this stage may save you a world of worry once the case goes to bankruptcy court.
Do-it-yourself kits and unlicensed paralegals can sometimes be a useful resource for helping a person get documents together, but with ever-changing laws and rules, even experienced attorneys can find the process daunting. A pro se Chapter 7 bankruptcy filing is far more complex than preparing your taxes or even preparing your own divorce, if you’ve ever tried that.
Free Consultation: Oklahoma City Chapter 7 Bankruptcy Lawyer
Chapter 7 bankruptcy provides a way out from under the worry, stress and embarrassment of garnishments and collection calls. With your debts discharged, you can begin to rebuild your financial life. If you’re not absolutely certain you have the skill, time and wherewithal to file Chapter 7 bankruptcy without a lawyer, call the Debtline Law Office today.
Even if you’re still considering a pro se filing, our experienced Oklahoma City Chapter 7 bankruptcy attorney is available to answer your questions about whether pro se is the best way to handle this important financial step. For a free consultation, call the Deptline Law Office today at (888) Debt-Line or (405) 563-7888, or if you prefer, send us a question using the Ask The Attorney form at the top of this page.