One of the consequences of the 2005 changes to the bankruptcy laws has been to make personal bankruptcy more complicated. Prior to October, 2005, if you happened to visit bankruptcy court on a typical day you would find both experienced bankruptcy lawyers as well as general practitioners who might file one or two cases a year. Chapter 7, in particular, was perceived as a fairly straightforward task that required little more than a bankruptcy preparation program and a general overview of bankruptcy law.
In those days, a reasonably intelligent pro se debtor – a bankruptcy filers proceeding without a lawyer – might very well be able to handle a simple case, especially if the debtor had little or no income and unsecured debt only.
General Practice Lawyers Rarely Dabble in Bankruptcy Because of the Many New Rules
These days, you rarely see lawyers who dabble in bankruptcy work. The changes to the law brought about by the 2005 BAPCPA amendments to the Bankruptcy Code have made the bankruptcy process more complex and thus more expensive in terms of legal fees. Even the bankruptcy court filing fee has risen to $335 in Chapter 7 cases and $310 in Chapter 13. When you add the filing fee cost to the fees charged by credit counseling agencies for pre-bankruptcy counseling and pre-discharge education, every filer will be looking at spending well over $400 before attorney’s fees to open the door to bankruptcy court.
So, while the demand for bankruptcy has not changed, the 2005 changes to the bankruptcy laws have made bankruptcy impractical for low income debtors. Yes, you can be too broke to file bankruptcy.
Filing Without a Lawyer is a Bad Idea
While it may be tempting to try and save money by proceeding without a bankruptcy lawyer, this is not a good idea. There are simply too many traps for those not familiar with the process. A high percentage of cases are now being filed by fewer and fewer law firms. In Atlanta, you will find two or three “high volume” discount price law firms that file hundreds of cases per month, and a few firms like Ginsberg Law Offices that focus on personal service and high quality representation.
While your desire to save money might motivate you to consider filing bankruptcy without a lawyer, there are many compelling reasons why hiring an attorney is a good idea. Here are some reasons why:
- do you know about the pre-bankruptcy credit counseling and pre-discharge financial management course requirements? – Do you know where to get your certificate and how to file the paperwork?
- do you know how to physically file your case? – lawyers have electronic filing accounts set up with the clerk of Bankruptcy Court. While you can still personally bring your paperwork to the Clerk’s office where you can use equipment to scan documents, the filing process for non-electronic filings is cumbersome and time consuming
- do you know how to calculate the “median income” test required in all cases and the “means test” required in many cases? Do you know where to find the statistical data used in these tests?
- if you have filed before, are you aware of the changes to the law regarding second or third case filings?
- do you know how to reconcile a means test budget with the “real life” budget of your petition?
- would you know how to handle an objection by the United States trustee or by the Chapter 7 or Chapter 13 trustee?
- in a Chapter 13 case, do you know where to get the approved Chapter 13 plan form for your jurisdiction?
- in a Chapter 13 case, do you know how to calculate pre-confirmation “adequate protection” payments, and post confirmation distributions?
- would you know how to respond to objections to your Chapter 13 plan filed by the trustee or creditors?
Filing bankruptcy should not be a complicated process, but Congress has made it messy and the paperwork intensive. We hope you will entrust your case to Ginsberg Law Offices.