Do You Need an Attorney to File Chapter 7?

By Chris Blank

If you are facing a mountain of debt, you may conclude that you'll never be able to repay everything you owe. Filing a petition for Chapter 7 bankruptcy might be the only way out, but the cost of an attorney could be holding you back. It is possible to file Chapter 7 bankruptcy without an attorney, although attempting to do it on your own is unwise. Fortunately, help is available and it may be more affordable than you think.

Chapter 7 Bankruptcy Requirements

You are legally allowed to file a Chapter 7 bankruptcy petition on your own, but a bankruptcy court will usually discourage you from doing so unless you have legal training. The documents for a Chapter 7 petition are lengthy and complicated, and the clerks at the bankruptcy court are not allowed to give any help. Completing the petition for Chapter 7 bankruptcy is only one of many steps in the complicated process of obtaining a discharge for your debts, which usually requires at least several months to complete. Each step in the process requires following legal procedures that must be strictly observed.

Chapter 7 Procedure

Your petition must include an inventory of your assets as well as a listing of your creditors, contact information and the amounts you owe each creditor. You must also submit to a means test to determine whether you qualify for Chapter 7 or must file Chapter 13 instead. Within 180 days before filing your petition, you must undergo credit counseling and submit a certificate to the bankruptcy court. You will be assigned a trustee, who will schedule a meeting between you and your creditors. At this meeting, you must answer questions under oath about your finances. The trustee determines whether you have assets that can be liquidated to pay your creditors. You must complete personal financial management instruction within 45 days after the meeting with your trustee and file the required paperwork with the court.

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Possible Pitfalls

Making a mistake could cause your bankruptcy petition to be delayed. In extreme cases, the court might even dismiss your petition. For instance, if you fail to complete credit counseling or personal financial management instruction within the deadlines set by the court, your petition may be dismissed. In some states, debts that are not properly listed in your petition will not be discharged. Filing a petition with missing pages or omitted sections could delay your discharge, or the court could throw your case out entirely.

Alternatives to Attorneys

Hiring an attorney to assist you with filing a Chapter 7 bankruptcy petition isn't cheap. As of 2012, you may expect to pay more than $1,200 for an attorney to help you prepare the necessary documentation, in addition to court costs. However, if your income is very limited, you may qualify for free or low-cost assistance from a legal clinic in your area. Another option is to use an online document preparation service. Although a document preparation service can't represent you in court, you may be able to consult with a specialist or an attorney as you prepare your petition.

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Can They Foreclose on Your Home If You Have Filed Chapter 7?



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The Average Cost of Chapter 7

Filing a Chapter 7 bankruptcy case may seem like a costly endeavor. The fees and costs associated with a bankruptcy filing can add up quickly, but when you consider the emotional and financial toll you might suffer by trying to pay down debts you cannot afford, the cost of a bankruptcy proceeding seems more reasonable.

Advantages & Disadvantages to Declaring Bankruptcy

Bankruptcy is a court process available by federal and state laws to help both individuals and businesses shed unsustainable debt and get back on their feet financially. It offers a second chance at a clean financial slate, but it also has disadvantages. Bankruptcy may not be your only option to resolve your debts, but its advantages may outweigh the disadvantages in your particular situation. You may wish to consult an attorney before deciding whether bankruptcy is the best option for you.

Legitimate Reasons for Bankruptcy

If you're experiencing financial hardship and considering filing for bankruptcy, you'll need to have a legitimate reason. Individuals usually file under Chapter 7 bankruptcy proceedings -- sometimes called "debt wipeout," or under Chapter 13, which offers a repayment plan with creditors while the debtor is under court protection. Before you file for bankruptcy, consider your financial circumstances, your debt level and your reasons for doing so -- bankruptcy will impact your finances beyond your immediate debts.


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