Do it Yourself: Something to know before filing bankruptcy

Written into the new bankruptcy law is an important message.  Section 527(b) of the Bankruptcy Law says If you pay anyone to help you prepare the petition, the law requires that you be given a written contract setting out what that person will do for you and how much it will cost.  Generally a non attorney petition preparer may charge no more than $200.  Attorneys usually charge more,  but depending on the complexity of the case, the expense may be worth it.

Before filing a bankruptcy case, you should determine for which type of bankruptcy you qualify. Be sure you understand the relief you can obtain and its limitations, but don’t let a non-attorney make that decision for you.

To file a bankruptcy case, about 60 pages of documents will need to be filled out and filed with the bankruptcy court. You will have to pay a filing fee, which is presently set at $335 for a Chapter 7, but this fee will likely increase.  About 30 days after your case is filed, you will have to attend the required first meeting of creditors where you will be questioned by a court official called a ‘trustee’ and possibly by a creditor or two.

If a chapter 7 case is appropriate, you may be asked by a creditor to reaffirm a debt. Reaffirmation is a procedure which results in you keeping your debt after bankruptcy and the decision to use it should not be made without being informed of the consequences.  A creditor is not permitted to force you to reaffirm your debts.

If you choose to file a chapter 13 case in which you repay your creditors what you can afford over 3 to 5 years, you may also want help with preparing your chapter 13 plan and with the confirmation hearing, which will be before a bankruptcy judge.  Chapter 13 cases are complicated and I recommend you get professional legal help.

Although bankruptcy can be complex, many cases are routine, but a simple case doesn’t mean that you shouldn’t get help.  Only an attorney can give legal advice and a bankruptcy involves making decisions after being informed of one’s legal rights.  Paralegals and petition preparers do not have the education or experience to provide this service.  At CAOBL you can get this advice from a licensed attorney experienced in bankruptcy law at a very reasonable cost and without the trouble of traveling to the lawyer’s office.

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