Filing a bankruptcy petition without an attorney can be a vastly time consuming task. You will need to learn a couple of procedures, laws, and documents. It is not an impossible task but due to the effort required it is quite easy to make a mistake during the process or even before you are ready to file. Here some of the common mistakes you can avoid in the filing of a bankruptcy case.
Filing for Bankruptcy When It’s Not the Right Choice
Simply because you are in some debt or you missed one payment does not mean filing for bankruptcy is the best option for you. Some debts that are incurred can’t be discharged. Even more, if you have some assets that you are not willing to let go you could lose them if you filed for Chapter 7 bankruptcy. To help a debtor decide on whether they should file for bankruptcy they should consider the type of debt they want to wipe out, whether they own any non-exempt property, or whether they can afford to pay.
Filing Under the Wrong Bankruptcy Chapter
Most of the people who file for bankruptcy believe they should file a Chapter 7 so they don’t have to pay anything back. Although it is true that most of your debt will be forgiven in a Chapter 7, if you have any nonexempt assets, they will be taken by the trustee and liquidated to help appease your creditors. It is important to know what situation you are in and what chapter you should file so that you receive the best possible outcome.
Not Completing Bankruptcy’s Credit Counseling or Debtor Education Requirements
If you are interested in filing for bankruptcy and plan on receiving a discharge you are required to complete debtor education and credit counseling courses.
Not Completing the Required Credit Counseling
You are required to receive credit counseling before you file for bankruptcy. When filing for you will need to submit a certificate of completion to the court. If you don’t complete the course the court may dismiss your case.
After you file your case, you must also complete a course debtor education course. If you don’t complete the debtor education requirement, the court will not issue a discharge in your bankruptcy.
Not Filing the Correct Forms
When filing for bankruptcy you are required to complete a packet of documents which include your petition, schedules, statement of financial affairs, and other necessary documents. If you did not hire an attorney it is your responsibility to know which documents to file and how.
Not Following the Rules of Your Local Bankruptcy Court or Trustee
The rules of a bankruptcy court are generally the same with a few having a different rule or two but they must always be followed. After filing for bankruptcy the filer is usually required to provide the trustee with certain documents meaning that the trustee might have rules of their own that the filer must follow. Failure to follow those rules may cause a delay or even a dismissal of your case.
Not Using Bankruptcy Exemptions Properly
Exemption in a bankruptcy allow you to retain a certain amount of property in chapter 7 and lessen the amount you pay to unsecured creditors in a chapter 13. Exemptions are paramount because they can be the defining line in you keeping or losing an asset, such as your house, in a bankruptcy.
Not Going to Your Meeting of Creditors
After you initially file for bankruptcy, usually between 20 to 40 days, you are required to attend a meeting of creditors or, as it is sometimes known, the 341 hearing. At the meeting the trustee will ask you questions while you are under oath about your financial affairs, which you are obligated to answer truthfully. You will receive a notice from the court, usually by mail, containing the information of your 341 hearing. Failure to show might result in the dismissal of your case.
Not Filing a Feasible Chapter 13 Repayment Plan
If you file for a chapter 13 bankruptcy, the court will allow repayment of your debt in the form of a repayment plan. You can make a proposition on the terms of the repayment plan and then the court will review your proposition and make a decision. If it is not a fair repayment plan the creditors and the trustee and object to it, causing the court to make a decision that will probably not be in your favor.