Filing Iowa Bankruptcy Without a Lawyer… Really?

Do I need a lawyer to file bankruptcy in Iowa? The short answer is no but it can be a very costly mistake. The penalties for making a mistake can be severe.

The main reason people choose to not hire an attorney for bankruptcy is to save money.  That’s a lot like saving the cost of a map when you are somewhere you’ve never been before.  You would be very lucky not to get lost along the way!  In this article I am going to explain to you why you must have adequate legal representation in bankruptcy.

If you are thinking about filing bankruptcy you are probably thinking, how am I going to pay my attorney fees when I am already having trouble paying my bills?  We will work with you and do our best to help you find a way to gather the money together to file for bankrutpcy.  When a person represents himself or herself in a legal matter it is called “proceeding pro se.”  Frequently I see debtors who think they know how to represent themselves in bankruptcy court, but normally that is not a good decision.

WHAT HAPPENS IF I MAKE MISTAKES ON MY BANKRUPTCY PETITION?

It is inevitable that mistakes will be made.  The consequences for not properly listing your assets or attempting to hide them can be much worse than the loss of your possessions.  Fraudulent concealment or false statements are punishable under the law.  The federal government investigates bankruptcy fraud and prosecution can lead to a $250,000 fine and/or 5 years in prison.  While merely making a mistake normally will not result in jail or fines, the stress of fixing the mistakes and going through the process of having the United States Trustee haul you before a judge can feel worse.  In addition to possible fines or jail time, messing up your bankruptcy petition will likely lead to having your discharge denied, or revoked if a discharge has already been entered.  The whole purpose of filing for bankruptcy is obtaining the discharge.  Any money you perceive you are saving will pale in comparison to the costs you will incur while suffering from trying to file yourself.  An attorney can help to avoid mistakes or fix mistakes if they are made.

HOW WILL I KNOW IF BANKRUPTCY IS THE ONLY OPTION FOR ME?

Setting aside the issue of properly reporting information on your bankruptcy petition, there is still the issue of deciding if filing for bankruptcy is in your best interest.  Many times people who come for a free initial consultation thinking bankruptcy is their only option find that they have numerous other options. Des Moines attorneys, Sam Marks and Ashley Zubal,have handled thousands of cases and done more than twice as many client consultations.  The experience of a knowledgeable bankruptcy attorney can be priceless.  Let the attorney quickly and efficiently advise you of all of your options.

HOW LONG DOES IT TAKE TO PREPARE A BANKRUPTCY PETITION?

You also have to consider how much your own time is worth.  In order to be fully informed you are going to have to research the bankruptcy process, rules, and regulations before starting your petition.  Pro se litigants should be familiar with the United States Bankruptcy Code and the Federal Rules of Bankruptcy Procedure.  Attorneys spend years learning the bankruptcy process.  This is not something that can be learned in an evening.

It is crucial that you have the proper knowledge when approaching a bankruptcy case. Of course, there are many books that explain how the process works and how to prepare a bankruptcy petition.  Any good book will be hundreds of pages long, but no one book will be totally inclusive.  Yes, any American consumer can file their own bankruptcy petition.  However, there are so many traps for the unwary that even attorneys who do not regularly practice bankruptcy often get their clients into hot water.

WHEN IS THE RIGHT TIME TO FILE BANKRUPTCY?

The first step in filing bankruptcy is determining when the petition should be filed.  A debtor has the right to determine when the correct time is best to file.  Tax refunds, asset preservation, and many other aspects of the success of your bankruptcy are all affected by when a bankruptcy petition is filed.  Some clients want to file for chapter 13 bankruptcy to save a home.  The timing of a foreclosure and the timing of the bankruptcy can directly affect each other.  It takes an experienced attorney in each area to resolve the conflicts created by each.

Timing may also affect whether the debtor passes the means test and thus qualifies for a chapter 7 bankruptcy.  Debtors are allowed to maximize their rights to the extent allowed by law, and filing the case at an opportune time is not an indication of bad faith, but an acceptable exercise of rights granted by the Code.

Many debtors do not realize that certain conduct which may have occurred years before filing can have a major impact on the success or failure of a bankruptcy.  For example, giving away assets or transferring an interest in real estate can result in significant litigation in the bankruptcy case.  Such matters are regularly reviewed by bankruptcy counsel before a bankruptcy petition is filed.  There are many reasons why assets such as automobiles, stocks, and homes cannot be transferred before bankruptcy.

WHO IS GOING TO LOOK AT WHAT I PREPARE?

With the overhaul of the bankruptcy code in 2005 a new complicated means test was developed. The means test was created as a method of developing a uniform system of qualifying debtors for bankruptcy. Once your petition is complete it will be scrutinized by both the trustee and the office of United States Trustee to ensure everything is accurate, all of the requirements under law are met, and that you qualify for bankruptcy.  Of all the people I have seen file for bankruptcy pro se, only 3 have completed the means test correctly.  Ironically they still messed up their petition and had to pay an attorney to fix the mistakes.

In every bankruptcy case, the debtor must appear before a bankruptcy trustee at a 341 meeting.  The essential purpose of the trustee is to investigate the debtor and determine if there are any assets that can be taken for the benefit of creditors.  The type of exemptions you can use and the amount of each exemption can be complicated and vary from state to state. If it’s not done correctly, the debtor faces losing property that otherwise might not have been lost. A well seasoned bankruptcy attorney will know how to take the steps so that you avoid any complications or embarrassing situations at your 341 meeting with the trustee.

In conclusion, you may make the choice to try to file for bankruptcy on your own to save in attorney’s fees only to learn that you’ve made a mistake that will cost thousands of dollars.  Penny wise, in other words, can end up being pound foolish (I love that saying.  Go look it up on Google). A completed bankruptcy petition is anywhere from 30-50+ pages long.  Although it is written in plain English it can be very overwhelming, especially for somebody who has never seen one before. The petition requires numerous schedules, budgets, and proper debt and asset information be listed.

Think of your bankruptcy attorney as investing in a GPS system that will guide you step by step.  Contact Marks Law Firm for a free consultation so that an attorney can show you how the bankruptcy process can help you get a fresh start. We can stop the phone calls and get you back on the right foot.

 

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