One of the most ironic and strangest things about
bankruptcy is that you have to have money in order to file a bankruptcy case.
You will have to pay filing fees and credit counseling fees. You will also have
to at least hire a petition preparer to help you with the required filing forms
and are well advised to hire a bankruptcy attorney.
As an aside: You may think you can file your own
bankruptcy case--just like you may think you can fix a leak on your roof. And
you may be right, you likely could fix the leak. But, with your lack of
experience, you have a greater chance of falling off the roof than a
professional. Consider bankruptcy the same way, you could do it yourself but
you are much more likely to cause yourself problems that a bankruptcy lawyer
would know how to prevent.
Still, I am encouraged by a new program being rolled out
in New Mexico and two other bankruptcy districts. The bankruptcy court in New
Mexico is introducing the Pro Se Pathfinder Project. The Pathfinder Project is
a new program that tests a do-it-yourself e-filing of consumer
bankruptcies- similar to online tax preparation software.
In New Mexico, one out of every 10 bankruptcy petitions
is prepared by the debtor him or herself- known as a "pro se" filing. In
addition, the state has a scarcity of consumer bankruptcy attorneys in much of
the state. Also participating in the rollout is California's central judicial
district - the Los Angeles area - where one-third of all bankruptcy petitions
are pro se; and New Jersey, where 8 percent are pro se.
The Pathfinder Project will be designed with graphics,
audio and video to make it as user friendly as possible. Pathfinder will guide
the do-it-yourselfer through the paperwork, moving the computer cursor through
the multitude of requests for information and documentation. A box explaining
what's wanted will pop up as the cursor hits each request. Best of all, the
explanations will be in plain language.
If successful, the Pathfinder Project could save many
potential debtors a good deal of money. In Albuquerque, New Mexico, a consumer
can pay in the range of $800 for an uncomplicated petition for a Chapter 7
bankruptcy case. A chapter 13 petition, however, can run as high as $4,500
depending on the circumstances.
The Pro Se Pathfinder Project will not offer legal
advice, and is not aimed at replacing attorneys, but simply serve as a guide
through the paperwork. It will be offered as a free alternative to bankruptcy
petition preparers, who operate outside the court system.
Still, the tendency will be for people to use the
Pathfinder Project and not seek the help of a bankruptcy attorney- after all,
most will think the hard part of filing out the filing documents is over.
Even with filing documents done, I would not recommend
filing a bankruptcy case on your own. Either way, make sure you read the Road out of Debt so you understand
what you can and cannot do through a bankruptcy filing and so you have a good
knowledge of what will happen to you and your assets in a bankruptcy case. Most
likely nothing will happen, but read the Road out of Debt to make sure.
articles about consumer debt by Ted Connolly, co-author of The Road Out of Debt
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When do we know if we need a bankruptcy attorney?
Thanks for the tips about DIY bankruptcy filing. I actually agree with Lucas, and I have the same question: When do we know if we need a bankruptcy attorney? I'm trying to help my parents out with their bankruptcy process, and it's really confusing!
I've always thought that having a live person to help out like an actual bankruptcy attorney is the best option if you can do it. Personally even with the help of new technology I wouldn't trust myself to do it right. Thanks for keeping us aware of the DIY options though. For some people it might be the only option.
I loved your analogy of the roofer. Like you said, it can be a complicated process (even if it seems easy), so it's best to go in with a guide. A bankruptcy attorney is just that. It's their specialty. With them leading you through the process, it's very likely the process will go smooth, without any mistakes. (Like a hole in the roof or a broken back).
I agree with this guy. It is way to risky of an endeavor to take on by yourself. This is one thing where you need some advice and help. Bankruptcy has an effect on your long term financial future, and if you foul it up, it's all on you.