How to File Chapter 13 Bankruptcy without an Attorney
Filing bankruptcy on Long Island is a decision that should not be taken lightly by anyone. The process can be intricate and confusing for most novice filers who attempt the legal task without the assistance or representation of an experienced attorney. The ramifications following a bankruptcy petition acceptance is long-term in most situations regardless of the chapter being requested. It is important to understand that filing a bankruptcy petition is the equivalent of asking the government to intervene in a private credit arrangement to block the creditors from exercising their rights to pursue legal remedies against an account discharge. The creditors can always contest the terms, and the court refuses more petitions than filers realize. It is not an automatic process by any stretch, and petitions filed without legal representation are commonly rejected by the court for a variety of reasons. Even qualifying within the scope of the means test can be complicated for a DIY bankruptcy petitioner.
Preparation is Key to a Successful Chapter 13 Case
The best method of beginning the process is doing a complete workup well before filing. All aspects of the petition should be addressed on a practice version and evaluate the best information for each step. The first step will be evaluating the information needed for the means test, which will determine if you can even file. Each chapter of bankruptcy is different as well. Those seeking to discharge overwhelming debt will typically use Chapter 7, but all clear personal assets could be marked by a judge for sale with the proceeds being applied as payments to creditors. Chapter 13 filings are different to a large degree, and they are normally used to keep from losing a home or some other type of real estate that would be vulnerable for sale or possession in a Chapter 7 petition. The means test is also used to qualify for Chapter 13 as well, and the terms of the repayment plan must be acceptable to all other parties.
Chapter 13 Repayment Plans
DIY pro se bankruptcy petitioners must develop a feasible repayment plan that is usually set at five years for all outstanding debt to be considered paid current. Chapter 13 can include some discharging of debt as in a Chapter 7 filing, but the real advantage of a Chapter 13 filing is that it can protect a home from foreclosure and protect your credit rating in the end. Sometimes creditors will renegotiate outstanding accounts to avoid inclusion in a bankruptcy petition, but these must be finalized before the petition becomes effective. This is a component of filing for bankruptcy where having a legal representative negotiating an agreement is a real advantage. The purpose of a Chapter 13 petition is effectively a debt consolidation plan that repays as many creditors as possible while protecting a dwelling and minimized the credit rating damage to the petitioner. More on how Chapter 13 can impact your credit here.
The Advantage of Legal Representation
Having an experienced Long Island Bankruptcy lawyer completing the preparatory tasks as opposed to a DIY petition is often cost-effective when all financial issues are considered. The first advantage is they already know what can be included in a successful petition, and more importantly, they understand what will cause a petition rejection from either the court or a creditor. A bankruptcy lawyer is a professional negotiator as well as a legal representative, and representing clients commonly entails some type of third-party negotiation. Legal counsel suggests seriousness to a creditor when asking for a restructuring of debt. Outside agreements will be more readily acceptable in some cases, depending on the debt level. An attorney also understands all potential exemptions when conducting an official means test, which can result in financial savings in the long run when a petition is accepted. Maximizing debt discharge and asset protection is important when submitting a file.
Potential For File Rejection
The biggest problem a petitioner will face will be the high rate of petition denials, which is as low as 1% in some states. Almost all DIY submissions will have problems of some sort, and there are restrictions on how many times a petition may be filed. It is very important to get it right the first time. A denial becomes part of the official record, and a rejection can impact subsequent attempts to alleviate debt and get a financial budget under control. Providing correct information and classification for the means test is essential, as is inclusion of all possible exemptions. Having an experienced debt consolidation lawyer means that the process is adhered to exactly as prescribed by the law, assuring the filing party that the request is structured in a manner that the judges will entertain positively.
Always remember your goal when making the serious personal decision to file for legal debt protection. Although you make think you are avoiding an attorney fee, the truth is that it could cost more in lost exemptions and a potential petition rejection when vital information is not included or evaluated incorrectly. Unless you have completed the process successfully before, it is always best to have legal counsel.
For more information on the Chapter 13 bankruptcy process, or to speak with our Long Island bankrtupcy team, contact The Law Offices of Adam C. Gomerman today.