Saving attorney fees must be weighed against the work of 'pro se' bankruptcy cases
With do-it-yourself kits for filing bankruptcy available to consumers, people in serious financial straits may be inclined to represent themselves in court rather than pay attorney fees. But the savings in "pro se" cases - in which people act as their own lawyers in a legal matter - has to be weighed against the technicalities that debtors need to master when they seek relief from the U.S. Bankruptcy Court.
According to United States Courts, those who decide to represent themselves need to understand the ramifications of undertaking this difficult task. The bankruptcy trustee who oversees the case, as well as court staff members, are not allowed to provide them with legal assistance.
"The rules are very technical, and a misstep may affect a debtor's rights. For example, a debtor whose case is dismissed for failure to file a required document may lose the right to file another case or lose protections in a later case, including the benefit of the automatic stay," the website states.
The obvious benefit of filing bankruptcy without an attorney is the lower cost. A $306 fee is charged to file under Chapter 7, the most common form of personal bankruptcy. Generally, lawyers' fees for Chapter 7 bankruptcy cases range from $1,000 to $2,500, in addition to the court fee.
The court charge to file a Chapter 13 case is $281. Because debtors must pay creditors through a court-ordered repayment plan over several years, these cases are more complicated than Chapter 7. As a result, attorney fees are higher and typically range from $2,500 to $4,000 during the three to five years that the case is active, depending on where the case is filed.
Chapter 7 is usually a straightforward liquidation process in which major properties such as a house or car are usually exempt and other assets are sold to pay creditors. In a Chapter 13 action, people who represent themselves are faced with negotiating the requirements of a court-ordered plan to repay some of their debt.
For people who are intent on representing themselves in bankruptcy, there are non-legal agencies available to help them prepare documents for significantly lower rates than attorney fees, according to LawHelp. However, such services are not overseen by a professional organization such as a bar association, and consumers are ultimately responsible for presenting their case to the court.
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