FILING CHAPTER 13 BANKRUPTCY WITHOUT AN ATTORNEY

Attorneys filing a Bankruptcy on your behalf can be very costly and may not fully review the merits of your plan until you have paid them in full. So is it worth filing bankruptcy without an attorney? Attorney fees associated with a bankruptcy can range between $1800 to $4500 dollars. The bankruptcy fees alone can bar almost anyone one seeking protection which one may otherwise well qualify for. But if you're serious about filing alone, here's some information you should know.

Before filing bankruptcy without an attorney, you must obtain the necessary petition forms from your local district Bankruptcy Court, an office supply, or stationary retail store. Your local district Bankruptcy Court probably has the chapter 13 bankruptcy forms on their website. The Bankruptcy Court will in fact recognize your bankruptcy filing without an attorney as Pro Se. This is the Court’s terminology describing a person self-representing him/her self in Court.

The bankruptcy petition mainly consists of a listing of information disclosing everything relevant to the Court about your bankruptcy action. This listing of information is done on 10 main petition forms called "Schedules". The Schedules are alphabetically named Schedule A to Schedule J and each discloses specific information to the Court for consideration of the protection you are seeking. The additional petition forms are discussed further on.

This is your opportunity to fully identify the creditor(s) you would like protection from, the amount of debt claimed against you, your income and living expenses and any other savings or assets that should not be subject to any claims by your creditor(s). If you improperly identify your creditors on the petition, you may not obtain the protection you had intended. So make sure that you have the spelling, business name, and addresses of your creditors accurately listed on the Schedules.

You are about to embark on a legal process, which may require you to possibly negotiate your claim with an attorney that may get hired by the creditors you seek protection from. Soon you will also stand before a Bankruptcy Court Trustee who may decide to not care less that you don’t have an attorney. You’ll stand on the same line other attorneys stand in wait to have their clients’ bankruptcy petitions officially filed and stamped by the Court.

This experience can be sobering but this should not discourage you from understanding fundamentally what is required of you and how to transpose that basic understanding on petition forms that can at times seem repetitive.

The form Schedules and additional petition forms discussed in more detail below:

Schedule A. Real Property

This schedule requests that you disclose any real estate you own. This may include vacation timeshares, cemetery lots and vacant land, which can often be owned by deed and may be reported with a mortgage.

Schedule B. Personal Property

You are required to let the Court know all the assets you own. This is for your protection. Here you would list significant personal items like your savings/checking account, retirement and investment accounts, jewelry and furs, and household items like entertainment systems and furniture, and miscellaneous items like clothing and cash on hand.

Schedule C. Property Claimed as Exempt

Exempt property simply means that your assets are only subject to creditor claims once they are above a certain monetary value. The minimum protection varies from state to state.

Schedule D. Creditors Holding Secured Claims

This is probably the single most reason you decided to file a repayment plan. A secured claim is made by the creditor attempting to repossess or foreclose on your property. A secured claim is protection you seek arising from credit you received that is tied to some form of tangible property like a car or a house.

Schedule E. Creditors Holding Unsecured Priority Claims

An unsecured priority claim stands in line ahead of everyone else. This is usually government institutions and municipalities such as the IRS, state and local taxes, student loans or a claim against you made for child support obligations.

Schedule F. Creditors Holding Unsecured Non-Priority Claims

Creditors holding unsecured non-priority claims do not have credit they extended you attached to property or collateral such as the secured creditor. Unsecured non-priority creditors are usually credit card companies or personal loans.

Schedule G. Executory Contracts and Unexpired Leases

Executory Contracts and Unexpired Leases are simply signed payment agreements that you have in place prior to filing your bankruptcy plan. An Executory Contract and Unexpired Lease can be an auto lease agreement, equipment rental agreement, landlord/tenant agreement, purchase agreement and any other signed agreement in which you can be held liable for future payments you agreed to make. Schedule G claims can be similar claims made by secured or unsecured creditors in that essentially those credit transactions also originated from an executed or signed agreement. Except an Executory Contracts and Unexpired Leases may involve claims against you for other kinds of signed obligations aforementioned, as well.

A Schedule G creditor has certain rights when you list them on the petition in as much as you may be obligated to return any property that you agreed to rent from them.

Schedule H. Codebtors

A codebtor is someone other than yourself or more than one person that is filing for bankruptcy protection jointly with you. This could be a spouse or someone that you hold an account jointly with, which you are seeking protection from.

Schedule I. Current Income of Individual Debtor(s)

Schedule I is the 2^{nd most crucial component of your bankruptcy petition because it asks you for all of your household income from all sources upon which a determination will be made to qualify you for the plan.This section will ask you to performsimple arithmetic by adding up all of your income sources into one subtotal. The Trustee will then evaluate you income against your current expenditures on the following Schedule J, but you should have a good idea if you will qualify for the plan by the time you complete Schedule J.}

Schedule J. Current Expenditures of Individual Debtor(s)

Schedule J asks you for an estimate of your average monthly expenses at the time your petition is filed and the subtotal of your net income as listed on Schedule I to determine if you have an income surplus. This is the single most important Schedule because it appreciates two major components, your income and expenditures. If you have an income surplus or Disposable Income as mentioned earlier, you are generally in good shape. Keep in mind that your proposed plan payment must be within range of your Disposable Income in order for your plan to be approved and confirmed.

Below are other important petition forms that you can expect to file with your Chapter 13 repayment plan.

Voluntary Petition

This is your official declaration of bankruptcy and gives the Court basic information about your filing. This is the document the triggers the automatic stay that prevents any further collection activity against you.

Summary & Declaration of Schedules

This is a basic listing of the alphabetic Schedules that includes more complete and specific information about your filing. The Summary of Schedules lists names and dollar amounts involved in the bankruptcy.

Statement of Financial Affairs

This asks you for a summary of your financial history 3 months prior to your filing. The summary would include assets, income, debts incurred and other miscellaneous financial information you may have transacted for leading up to the filing. The Court may review your Statement of Financial Affairs for any significant purchases or transactions made within that 3 month window before your filing..

Statement of Monthly Income (Means Test)

The Means Test is a 6 month average of your gross (before taxes) income. In a Chapter 13 filing, the Means Test will help the Trustee determine the length of time you should be in the plan (3 or 5 years). The Means Test has greater consequences for debtors filing a Chapter 7 (Straight Bankruptcy) because it was designed more so, as part of the recent bankruptcy legislation, to prevent bankruptcy abuse amongst Chapter 7 debtors.

Verification of Creditor Matrix

This is simply a listing of all the creditors you seek protection from by name and address. Be sure to accurately spell their name and address since this is the information the Bankruptcy Court will use to give the creditors notice of your filing.

Chapter 13 Model Plan (For Debt Consolidation & Repayment Only - Explained Further Below)

The chapter 13 model plan is the debt you propose to repay. Here you will propose the amount of debt, the monthly payment and the 3 to 5 year duration of the plan. If you're filing chapter 7 to eliminate debt, you obviously don't need a payment plan and you don't require income.

In a chapter 13 repayment plan, the key to getting your chapter 13 bankruptcy plan approved is demonstrating that you have income even after all your living expenses are met. If you can’t reasonably show left over income, then you simply will not qualify. It may seem harsh for the Court to use this criteria but it does make some sense. If the bankruptcy plan disrupts your household and prevents you from paying your rent, groceries, utilities, and other necessary bills, then the plan is just as burdensome as the unmanageable debt you seek relief from.

However, the demonstration of this so-called disposable income on your Schedule J is left in large part up to your good discretion. The expenditures you list obviously are not exact and will likely not result in much verification, as long as it’s reasonable. Expenditures are key because the higher the household expenditures the less disposable income available. More available income can also translate into a much higher plan payment, so it may be advantageous to list greater expenditures as to show minimal disposable income, hence a much smaller payment.

Filing chapter 13 without an attorney will require you exercise some wisdom. Have a good appreciation for what you intend to include or consolidate into the plan. If you try to manipulate your expenditures as to show less disposable income to achieve a smaller payment, make sure your proposed plan payment is sufficient enough to repay everything you need in the 3 to 5 years that you have available. If it’s not enough, you may not qualify and your petition will likely be dismissed.

Conversely, if you show very little expenditures as to show more disposable income to sufficiently fund the amount of debt your tossing into the plan, you risk the Trustee simply not believe you, especially if you have a big family. Multiple kids in a household usually mean a beefy grocery bill and day care costs. Kids have to sleep somewhere, which means you pay rent for a 2 or 3 bedroom apartment. You may also have a sizable mortgage. The Trustee may be aware of housing costs for your particular amenities and would weigh in on how reasonable your expenditures appear. The Trustee will have common sense and so should your Schedule J.

Schedule J’s expenditures specifically are:

Rent or home mortgage payment, utilities, home maintenance, food, clothing, laundry and dry cleaning, medical and dental expenses, transportation, recreation, clubs and entertainment, newspapers, magazines, books, charitable contributions, insurance, taxes, installment payments, alimony, maintenance and support paid to others, payments for support of additional dependents not living at your home, regular expenses from operation of business, profession or farm, and other expenses not listed on the form.

The Trustee approving your chapter 13 bankruptcy is not going to expect a perfect scientific tabulation of these expenses, and you will be extended some "wiggle room", but don’t try to fit a square peg into a round hole. Understanding these basics should help you put together something believable with your lifestyle and to file a successful petition without raising an eyebrow. Let the Trustee embarrass the person following you at the hearing that didn’t read this article. Good luck with your filing.