To file a bankruptcy case without an attorney in California, or in any State for that matter, is simply not advisable. Is it possible? Sure.
Prior to October 17, 2005, many individuals filed for bankruptcy without the assistance of an attorney, frequently using paralegals or "petition preparers." About 50% of the time**, in a simple Chapter 7 case, these cases turned out successful with a minimum of problems (although in many of these cases, amendments of the incorrectly prepared initial bankruptcy paperwork was necessary). In the other 50% or so of the cases, various degrees of devastation occurred, frequently requiring the assistance of an attorney (at FAR more than would have been paid to just file the original case) to fix the problems, if that was even possible. Chapter 13 and Chapter 11 cases are even more complex and hence, there is more room for problems to arise over the course of the bankruptcy case (which can be upwards of 3 years).
That was under the OLD bankruptcy laws. Under the new bankruptcy laws which took effect on October 17, 2005, bankruptcy has become far more complicated. Previously, bankruptcy law was complicated enough. Even non-bankruptcy lawyers would rarely take on a bankruptcy case due to all the nuances and pitfalls contained in the Code. Under the NEW laws, even some bankruptcy lawyers won’t take on the cases, so you have to ask yourself how on earth someone without any legal training at all, and certainly no bankruptcy legal training, can successfully navigate their way through all the steps in a bankruptcy process, including exemption planning, preparing the petition, schedules and supporting documentation, and complying with the Federal Rules of Bankruptcy Procedure as well as Local Bankruptcy Rules for whatever jurisdiction they are filing in. The means test analysis form itself (just one of the required initial bankruptcy forms) can take upwards of 4 hours or so for a competent bankruptcy specialist to complete!
All that being said, it is completely understandable that many in need of bankruptcy assistance, in California and elsewhere, cannot afford a bankruptcy attorney. Sad, but true. And where previously attorneys could afford to charge somewhat less for a bankruptcy, Congress–by enacting the new laws and holding attorneys potentially liable for the information that goes into the paperwork, among other things–has made that all but impossible now.
So what are your options? Well, you can still do-it–yourself and pray. Just be very careful because, for example, a dismissal of a case under the new laws carries consequences in future cases if you decide to or need to re-file. And, of course, if you don’t prepare your paperwork correctly or plan properly for your case, you could end up losing assets to the Trustee in your case, have your discharge denied, or both. Another avenue is to still have a paralegal or petition preparer do your paperwork, but that isn’t likely to put you too many steps ahead of the "do-it-yourselfers" out there. This isn't meant to say that all paralegals or petition preparers are incompetent. That is not true. Some are very qualified and do a good job. But one important single fact stands out with them all: They cannot under any circumstances provide you legal advice. Period. Which means, all they are really doing is acting as a typing service for you. This is even less than what you get by having your taxes done by H&R Block, because presumably there you at least get some qualified advice or input.
To cut down on costs, you could have the papers prepared, and then hire a bankruptcy attorney at a reduced rate to simply review and provide legal advice and suggestions to you to fix up your paperwork before filing and give you other necessary input. That would seem a good solution for many who can't otherwise afford an attorney.
In conclusion, when filing bankruptcy in California or any other State, you need to consider the costs and benefits of hiring an attorney. I can almost guarantee that it is worth spending the money to hire a competent attorney in order to achieve the results you desire. And don’t search for the bottom feeder attorneys that will save you a couple hundred dollars on fees. Often, the money you save up front, will cost you thousands more later. Remember, your goal is to eliminate the debt you have, not create more for yourselves later!
**These are the author's estimates, and not based on actual statistics. |
