Two Ways Do-It-Yourself Bankruptcy Can Be Problematic
Bankruptcy court allows petitioners to represent themselves, meaning you can generally handle all aspects of your case from start to finish yourself without having to hire an attorney. Just because you can do this, though, doesn't mean it's a good idea. Here are two ways handling your own bankruptcy case can hurt instead of help your situation.
You May End Up Losing Assets
Filing for bankruptcy only appears simple on the surface. You file the appropriate paperwork with the court, show up for your court appointments, and get your discharge a few months later. However, it's only that simple for people who have very few or no assets they must protect. If you own homes, cars, retirement accounts, expensive jewelry, or similar assets, you must take additional steps to avoid having them confiscated by the trustee and sold to pay your creditors.
For example, if someone representing themselves took the wrong exemption amount on their home by mistake, it could appear as though they have more available equity in the house than they really do. As a consequence, the trustee might plan on selling the home and using the equity to pay creditors, leaving the person homeless.
As a layperson, it's high unlikely you know all the rules and laws you can invoke to protect your assets, so you need to spend time researching the issues that will affect your filing to avoid accidentally shooting yourself in the foot.
Creditors Will Take Advantage of Your Ignorance
Your creditors' goal is to increase their odds of getting payment for the debts you want discharged, and they will use every tool available to them to do it. This means they may end up filing motions or adversary actions in your case. If you're not knowledgeable about the bankruptcy process or applicable laws, you could easily end up falling for their tricks and paying on debt that would normally be eliminated. Alternatively, you may lose assets simply because you don't understand the importance of the actions the creditor took and failed to respond appropriately.
Again, research will be the key to avoiding being taken advantage of. If you don't want to invest the time and energy to learning what you need to know to be effective in your do-it-yourself bankruptcy, the alternative is to hire—at minimum—a paralegal to help. While a paralegal can't represent you in court, he or she can provide you with the information you need to get through the bankruptcy process in one piece.
To learn more about what a paralegal can do for you or to get advice on your bankruptcy case, contact a local paralegal professional at a company like Shemesh Legal Services.