Here in the Central District of California, nearly 25% of all bankruptcy filings are made without a lawyer. Things recently got a little bit easier for this crowd in our courts; allegedly. This is an important issue with our courts as demonstrated by this open letter to our attorneys to volunteer to help these folks; Open Letter from Chief Judge Sheri Bluebond. I am happy to report that I intend and have already sent my E-mail to give some of my time this year, so look for me in Santa Ana, if you’re without a lawyer. Last month, in an effort to “help” the growing population of debtors filing bankruptcy without a lawyer, our Courts have decided that longer forms, with more self help is the answer. Many consumer lawyers disagree that this will ease the burden on our courts. Be sure to see the comments section of this article by Steve Rhodes (@getoutofdebtguy) over at the Huffington Post.
Here’s what’s new: FORMS. That’s right, we have new, “easier to read” forms, allegedly. These new forms provide a substantial amount of self help because when an individual files bankruptcy without an attorney, they burden the court system by taking more time at hearings and in the courtroom in educating and assisting these individuals. The additional support provided in these forms makes them longer and more laborious. I assert that with these new forms, I suspect that debtors without lawyers will now be held to a higher standard due to the additional information given. This means that trustees will continue to direct these debtors to consumer attorneys when their homes, cars and bank accounts are in jeopardy of being sold to pay creditors. What about that vacation rental you forgot to list? Did you forget to list all your debts? Any changes to your bankruptcy schedules is not as simple as whiting out the prior form and resubmitting it, but rather a complex process with cover sheets, service forms, additional filing fees, and the knowledge of how to correct or what changes to make. Correcting mistakes yourself may end up costing more than hiring an attorney to help you from the start. Yes we make it look easy, but that’s only because we do it professionally, know the rules and have relationships that you don’t.
Another great new tool is now available to Pro Se (meaning, without a lawyer) debtors: eSR (Electronic Self Representation). This process is intended to help navigate through the forms more easily. Now, you can file your bankruptcy case online, without an attorney. Keep in mind this path is for Chapter 7 bankruptcy ONLY. The reason for this is that filing a Chapter 13 Bankruptcy case is strongly discouraged, due to the complexity and statistically, there is a nearly 100% fail rate for those debtors without a lawyer. Here are just a few of the common problems in filing bankruptcy without a lawyer: the failure to file required documents, resulting in dismissal; filing a chapter which may not be correct for the debtor’s circumstances; choosing incorrect property exemptions; unnecessarily filing bankruptcy in the first place; not filing the required credit counseling or financial management certificate; being unable to answer or adequately defend an action seeking to deny discharge; and not understanding the significance of certain motions or adversary actions. There are so many pitfalls that I have not listed here that would likely scare the pants off a scarecrow!
Lastly, we also have for you, Notice and Service by Electronic Transmission. This means that you can elect to have bankruptcy notices sent to you via E-Mail. A review of our Local Bankruptcy Rule 9036-1, a debtor requesting notice delivery by email vial the Debtor Electronic Bankruptcy Noticing (DeBN) program only consents to delivery of orders and notices delivered by the Bankruptcy Noticing Center. All other parties, including trustees and attorneys, must continue to serve you via the U.S. Mail. If you are married, it may be wise to only sign one spouse for this service and keep the other spouse on regular mail service so you get the best of both worlds here and won’t miss any important information about our bankruptcy case.
Here are my pro tips for the “Do-it-yourself” folks: You must complete the prefiling credit counseling course BEFORE you file your bankruptcy case. For a list of court approved courses, click here. If you choose to go it alone, you’ll need to understand the processes and procedures, so watch those videos and read the rules of the court. If you get into trouble at any time during your case, you can always consult with an attorney. THE TRUSTEE MAY BE A LAWYER, BUT THEY ARE NOT YOUR LAWYER. Do not ask the trustee for advice, they won’t and cannot give you any.
I recently received a call from a women who had been trying to stop a foreclosure sale and filed a Chapter 7 bankruptcy case without a lawyer. When the lender came in to her case, asking the court for relief from the automatic stay so they could continue the foreclosure sale, the woman lost on that motion and the Order included “in rem” language, which meant that any other bankruptcy proceeding would NOT apply to her property, IF the order is recorded in the county records. Before the Order was recorded by the lender, she had her husband file a Chapter 13 case without an attorney. He filed a skeleton petition, which gives him 14 days to complete the remainder of required schedules or his case would be dismissed. After she had done all this herself, she called me for a consultation. During our conversation, I discovered that she had failed to disclose assets of her husband in her bankruptcy case and that the house that they are trying to save has no equity. I declined to offer representation in her Chapter 7 case because I know that if the trustee found out about the home that was not disclosed, that they would likely take and sell it to pay creditors. Still interested in going to court without a lawyer?
I’m just waiting for the day that Costco opens up a law school and gets into the business of legal forms, like Legal Zoom because I somehow fear that the movie, Idiocracy from 2006 will come true. There, I just revealed my secret fear. I feel better now. Try the new forms for yourself and get back to me on how your bankruptcy case went. I would love to hear from you. Lawyers across the country are standing by to assist you when things don’t go the way you thought they would. Many consumer protection, debt relief, bankruptcy lawyers offer free consultations to their prospective clients.