In Bankruptcy Information, Bankruptcy Questions, Filing pro se

Chapter 7, the most common form of bankruptcy and the one most people think of when filing bankruptcy, is often seen as little more than filling out a few forms. The bankruptcy court’s website has a packet of information and links to all the forms. So why shouldn’t someone do it herself? Here are six reasons.

Lose a house. Even if a debtor is current on mortgage payments, he could lose his house in a bankruptcy. Most debtors don’t understand how the various state law homestead exemptions work. How someone files (jointly or separately) can affect the exemption. How the house is titled can affect the exemption. If there are judgments against the debtor and the judgment liens aren’t avoided in the bankruptcy, that can lead to losing the house after the case is over. A good bankruptcy attorney can guide you through all the housing issues.

Lose tax refunds. Income tax refunds are fair game for bankruptcy trustees. The timing of filing can affect whether or how much of the refund could be lost. A good bankruptcy attorney understands the ins and outs of tax refunds.

Lose claims. If there are personal injury or medical malpractice claims, a debtor might end up not being able to pursue them after bankruptcy. Your bankruptcy attorney can address those issues, so you keep your claims.

Fraudulent conveyances. Some people think it’s a good idea to transfer property to a relative or friend just before filing bankruptcy so they don’t have to list that property. Usually this transfer is for little or no consideration. In other words, the debtor doesn’t get anything in return for it. That’s the hallmark of a fraudulent conveyance, which could end up costing the debtor her discharge. A bankruptcy attorney will ask about any transfers that could be considered fraudulent.

Lose a paycheck. In Utah there is an exemption for wages that have been earned but have not been paid, but once those wages are paid, no exemption exists. That means if you choose the wrong day to file, such as the day after pay day, you could lose that paycheck. A good bankruptcy attorney understands what part of a paycheck is at risk and can pick the best time to file.

Case could be dismissed. Even if everything is done right with respect to filling out the bankruptcy forms, it’s not over once you file. There is a continuing obligation to cooperate with the bankruptcy trustee until the case is closed. Receiving a discharge doesn’t mean the case is closed; the trustee might keep a case open for months or even years after a discharge. If you don’t cooperate with the trustee, he can ask to have your discharge revoked and your case dismissed. Your bankruptcy attorney acts as the intermediary between you and the trustee as long as the case is open.

A good bankruptcy attorney does a lot more than just fill out the forms and sit with you at the 341 meeting. A good attorney will make your case go smoother than it otherwise might. If you need help with a bankruptcy, call or text us at (801) 413-3708; email steve@schamberslaw.com, or click here.

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