Advise to Bankruptcy Self-filers

If you are planning to file Bankruptcy on your own or use a bankruptcy petition preparer to assist you in filling out and filing your bankruptcy papers, it's always wise to consult with an attorney prior to filing. About 20% of those filing for bankruptcy may run into some difficult issues and probably should not file alone. And among the 80% who are unlikely to run into any trouble with their case, a small percentage shouldn't file bankruptcy at all or should not be filing prior to some careful pre-filing planning. Some people are judgment proof and should not be filing at all and others need to plan to protect valuable assets. An individual filing without the assistance of an attorney will generally not be able to make these assessments.

For bankruptcy filers, these numbers indicate that it's best to get some expert advice prior to filing, even if your case appears to be simple. Using a non-attorney Bankruptcy preparer may raise issues with the Bankruptcy Trustee. Section 110(e) of the bankruptcy code prohibits a bankruptcy petition preparer from giving you even the most basic type of advice or information, only a lawyer can provide it. A trustee may want to determine if the preparer gave the filer any advice he is prohibited from giving which is basically everything. All the preparer is allowed to do is type the petition. One way to avoid this additional inquiry is to have an attorney review the petition before filing.  If an Attorney charges a fee for helping an individual file their petition or charges for a consultation, even a nominal sum, the attorney's name will appear in Item 9 of the Statement of Financial Affairs and the trustee won't even inquire about the origin of the customer's legal information. In other words, having an individual engage an attorney will let the trustee know someone has reviewed with the filer the legal issues. A legal consultation may help in allaying the trustee’s concerns about a bankruptcy preparer giving legal advice especially on issues such as the exemptions, but it may not provide the filer with adequate instruction and guidance. Most attorneys will not take on the limited role of guiding and assisting an individual to self-file as they prefer representing the client through the entire process.  The ideal situation for self-filers is a where they can engage the assistance of an attorney to review and prepare the petition for them.  Having an attorney assist a self-filer will also ensure the filer knows what documents must be provide to the trustee prior to the 341 meeting; therefore, making the 341 meeting a perfunctory and painless exercise.