Bankruptcy is designed to be a solution to serious financial trouble, and it very often is exactly that for individuals and businesses. Unfortunately, the bankruptcy process in Illinois, Missouri, and pretty much everywhere else is complicated. If you’re considering filing bankruptcy without an attorney, you certainly can do it — but that doesn’t mean you’ll actually be able to do it without making costly mistakes.
To clarify, in Illinois and Missouri, corporations and companies with more than a single owner are required to file bankruptcy through an attorney. Alternatively, individuals may legally file bankruptcy without being represented by a bankruptcy attorney.
However, you will be hard-pressed to find anyone, attorney or not, who will recommend undertaking such a complicated legal endeavor without an attorney. Read on to learn more about filing a Missouri or Illinois bankruptcy without a lawyer and some things you should consider before you make your decision.
The U.S. Court System Recommends a Bankruptcy Lawyer
We should begin with the most official bankruptcy recommendation you can find — the one from the Administrative Office of the U.S. Courts. This office maintains a detailed and informative website about bankruptcy. Here’s what it has to say about filing bankruptcy without an attorney:
“Individuals can file bankruptcy without an attorney, which is called filing pro se. However, seeking the advice of a qualified attorney is strongly recommended because bankruptcy has long-term financial and legal outcomes.”
There you have it. There is more detail to understand, of course, but the courts that deal with bankruptcies day-in and day-out have seen enough problems with filing bankruptcy pro se to make this statement.
Problems with Pro Se Bankruptcy
When an individual represents themselves in court, including Illinois or Missouri bankruptcy courts, that person is said to be acting pro se, which is a Latin term meaning “for oneself.” Pro se bankruptcy cases are highly controversial because of the complexity and difficulty in successfully completing the case. Bankruptcy courts are often forced to dismiss pro se cases because they are not being handled correctly.
Filing Bankruptcy Pro Se in IL and MO Is Highly Complex
Bankruptcy cases are known for their complexity, and they can be even more complicated if you own a lot of assets or jointly own property with a spouse or another individual. The primary problem with filing without a bankruptcy attorney is that the courts offer no forgiveness for mistakes, even if they are seemingly small and technical mistakes.
Any error made while filing bankruptcy in Illinois or Missouri can be potentially disastrous, and you may have to live with the consequences of the error for seven years. That’s how long a botched Chapter 13 bankruptcy stays on your credit report. For Chapter 7 bankruptcy, a problematic pro se filing can remain on your credit report for 10 years.
Some of the mistakes that those filing bankruptcy without an attorney often make include forgetting to list debts, forgetting to list assets, and not taking the proper exemptions.
What Happens if You Forget Debts or Assets
If debts are not listed, they will not be discharged through your case, and you will still be legally obligated to pay them. Think about that for a moment: You did this to wipe out your debts, but if you make mistakes, you could be left with enough debts to leave you financially struggling.
Forgetting to list assets can be even worse than forgetting debts in some cases. If all of your assets are not listed, you may face stiff penalties, and if your asset exemptions are not listed correctly, you could be forced to sell your necessities to pay off your creditors.
If you make several mistakes with your assets during bankruptcy, the court may even decide that your activity qualifies as fraudulent, which has criminal implications. Any bankruptcy case can be selected for an audit, and you will be forced to prove the accuracy and truthfulness of every claim you made.
What Happens if You Make Legal Mistakes
Adding to the complexity of a bankruptcy case is the fact that a pro se litigant will be required to follow all of the federal, state, and local rules and procedures that a bankruptcy attorney is required to follow. If you are unfamiliar with the court process and procedures, your case may be delayed or denied, costing you both time and money.
You can easily find the bankruptcy procedures required at the federal level, although they may not be easy to understand. But if you’re filing bankruptcy without an attorney in Missouri or Illinois, you will also have to keep in mind state-level rules. Then, you have to pay attention to the rules and procedures of the particular bankruptcy court you have to deal with.
That’s a lot of room for error. And in bankruptcy, errors can be extremely serious.
Basic Bankruptcy Procedures
When you file bankruptcy without an attorney, you will have to follow strict procedures. The process begins with deciding what type of bankruptcy you want to file: Chapter 7 or Chapter 13. Chapter 7 bankruptcy is used to discharge debts, whereas Chapter 13 bankruptcy is a debt reorganization plan.
Once you decide on the type of bankruptcy, you will complete a set of complex forms and submit them with the required filing fee. With these forms, you will also have to submit a certificate showing you have completed a pre-bankruptcy credit counseling class.
After you have filed, you will be given a date for a meeting with your creditors. Your creditors may or may not be present, but your trustee will determine if your case is in order. If everything is in order, your case will go to the judge, who will officially sign your debt discharge or complete a legally binding repayment plan.
Those are the basic procedures for Chapter 7 and 13 bankruptcies, but keep in mind that dozens of complicating factors can add to or change some of these protocols. If you’re filing bankruptcy pro se, it’s up to you to figure all of that out.
Filing for Bankruptcy with No Lawyer: Chapter 7 vs. 13
If you are filing bankruptcy as an individual — and not a partnership, corporation, or similar entity — you can legally file bankruptcy without an attorney in both Illinois and Missouri. However, you need to understand that the type of bankruptcy you are filing can have a big impact on how difficult your bankruptcy process is.
A great example of this is readily available when you look at Chapter 7 vs. Chapter 13 bankruptcies. Chapter 7 bankruptcy is the simpler of the two. That’s because Chapter 13 bankruptcy requires you to create a repayment plan for a portion of your debts, while Chapter 7 simply wipes out your debts. This is a three- to five-year plan that has to be fair and get approval from several entities. In other words, it’s complicated.
You may think: Why would I do Chapter 13 bankruptcy without a lawyer when Chapter 7 is simpler? But you may not have a choice. If you fail the Chapter 7 means test, which suggests your income is too high to qualify for Chapter 7 bankruptcy, Chapter 13 may be your only option. Similarly, if your bankruptcy will include a business partnership, you may be legally required to bring an attorney into the situation.
Avoid Petition Preparation Services
One shortcut many individuals take when filing bankruptcy is to forgo hiring a bankruptcy attorney and, instead, hire a petition preparation service. This may be an attractive option if you’re thinking about filing bankruptcy without a lawyer, but petition preparers are not recommended.
While these services can help you complete the documents and forms required for your case, they cannot offer any legal advice. It is a crime for anyone who is not a licensed attorney to offer any type of legal advice or help in making legal decisions.
A petition preparer can only fill out the information according to your decisions and instructions. This makes bankruptcy petition preparation services no more beneficial than a typing service. If you have questions or want advice, you won’t find what you’re looking for with a petition preparer.
Concerned About Bankruptcy Costs?
The primary reason people in Illinois and Missouri want to file bankruptcy pro se is to avoid paying attorney fees. That is understandable — you are likely already in a difficult financial situation, and you don’t want to add any unnecessary costs to the equation. However, when you think about what you’re risking by filing without a lawyer, you may begin to see that an attorney will more than make up for the added legal expenses.
For example, if you leave off or improperly list a debt that is worth the value of a new car, you may be left on the hook for that expense. With one mistake, you’re left paying more than you would have paid a bankruptcy lawyer. And that’s just one example of the many mistakes you could make.
If you decide you do want to file bankruptcy with a lawyer’s help, you can still take steps to reduce the total legal costs of bankruptcy. For example, you can save a considerable amount of money just by working with a bankruptcy attorney who doesn’t charge for consultations. Free consultations are something A Bankruptcy Law Firm, LLC, is proud to offer to new clients.
Benefits of Working with a Bankruptcy Lawyer
If you need more reasons to hire a bankruptcy attorney, consider the following benefits of working with a lawyer:
- Your attorney can help you identify the most beneficial type of bankruptcy to file in your unique case.
- They can handle all the time-consuming and stressful paperwork.
- They can come with you to the meeting of creditors and any court appearances.
- They can identify any potential problems with your bankruptcy filing and ways you can save money.
- They can help you understand the dates and deadlines you need to know and make sure you don’t miss anything.
- They know where to look for debts and assets you may forget to list in your filing.
- They can help you understand the proper bankruptcy exemptions to take.
- They can keep you informed at every step so you don’t have to be stressed or in the dark.
Missouri or Illinois Bankruptcy? Talk to a Lawyer
You can file bankruptcy in Missouri and Illinois without a lawyer. But should you? It’s a good question, especially considering that the U.S. court system recommends hiring a bankruptcy attorney.
Hiring a bankruptcy attorney is the recommended course of action for everyone filing. Because of the impact bankruptcy will have on your life and your financial future, you will want to make sure it is in the hands of an experienced professional.
To talk to an experienced professional about your financial options regarding bankruptcy, reach out to A Bankruptcy Law Firm, LLC. Claim your free bankruptcy consultation by calling (800) 7-BENSON or contacting our firm online.
Important Disclaimer: The information discussed above and throughout this website should not be relied upon to make any decisions without first speaking to a bankruptcy attorney. There are many intricate rules of law governing bankruptcy with many exceptions to the general rules that could change the advice given by an attorney based on the differing facts in each person’s special set of circumstances. THEREFORE, it is important to discuss any information contained in this website with one of our attorneys before taking any action or refraining from taking any action.
