How to file Bankruptcy without a Lawyer with Online Resources, A Personal Story

First, I must put out a legal disclaimer. Perhaps it’s a non-legal disclaimer since by no means do I claim to have any sort of legal training, expertise, or sanction. I am merely a person who through my own personal faults got into a situation where I filed for bankruptcy. I was just 23 years old when I went through this process. I represented myself and did all of my legal filing with no paid or volunteer legal assistance. I simply used internet resources to complete my own bankruptcy filing.

I had no desire to do this legal filing without a lawyer or some other legal representation. My financial situation however didn’t allow this wise course of action to be taken. I represented myself in court and completed all of my bankruptcy paperwork 100% on my own with no legal counsel. This is my story and some tips if you are considering this course of action.

I won’t get into how I piled up my debts or the mismanagement of my money. I will possibly address that in a future hub (which I will link here) or not at all. First some back ground, I got driven into bankruptcy after spending years fighting to get myself out of debt.

I paid down half of my debt load after years of working hard to get rid of it all; I had foolishly run up all of this debt between the ages of between 18 and 19. I worked over the next 3 to 4 years climbing out of debt until shortly before I turned 24 years old. After years of paying down my debts in a foolish manner things got out of hand. I would earn a bunch of money and then pay down a single debt in a lump sum completely eliminating a single debt, but leaving others unpaid. This method was not wise and a smarter method would have been pay a some on every debt. The later method may have kept me out of bankruptcy if I had followed it.

A reckoning eventually came when two of my creditors decided to file a lien on my bank account. This was just before I was about to go across the country for a survey job. I would be working on the road for four months. While working on the road, I would have needed to prove that every penny, I was spending out of my account was going for food, shelter or other living expenses. If I couldn't prove that it would be seized by these two legal firms for my creditors directly from my account. This would have been very difficult to do while I was across the country from my bank. So this put me in a panic, how was I possibly going to prove from Alabama o my bank and a court at home in Minnesota that I needed $20.00 to go buy food every day.

I was completely broke and when I called lawyers to find out the fees in 2004. Sadly for me, I didn’t have the upfront $500 to $900 they said it was going to cost to hire them to represent me. Looking back at my filings, I had $10 cash in hand and $60 in my checking account. Smartly, since I was filing for bankruptcy the lawyers had no desire to give me their services for anything less than full payment up front. Of course this was not an option for me.

After that, I called some local legal aid groups and found out they were so overwhelmed that unless I was in danger of losing a home due to bankruptcy, they would not help me out. I did not own a house so they were of no help to me at all.

This left me with Internet resources, where I read about the credit impact and those kinds of things due to the different forms of bankruptcy. Most of the time, they talked about how it can actually improve your credit and how it isn’t as bad as it sounds for many people. But they were of very little legal help.

So I decided to go to the local federal courthouse and pick up the legal forms, so I could have a look at them myself. I had few options at this point and I was going to brave the legal system myself without a lawyer. I got to the courthouse to get the forms and to my surprise they told me we don’t have them. I looked confused, so she said, you have to download them off the internet! So I wandered back home and printed out the forms. It turned out that filing bankruptcy was much simpler than I could have imagined.

Then I filed the Bankruptcy Petition and was able to block the liens against my bank account and all collection action against me. A few months later, I showed up for my appointed court date.

For a few hours, I watched as other people talked about their personal possessions and go on verbal record about their filing. Technically, this is where creditors could have shown up to challenge the debt claims but for the entire 2 plus hours I was there not a single creditor seemed to be in the building and certainly none testified in opposition to any of the cases.

Not quite 4 months after the original filing the bankruptcy was discharged, which means it was final and all of my debts were cleared that were listed on the filing, except my student loan debt which would have needed a special filing. It was overall a very simple and easy process.

Now 7 years later the bankruptcy is still on my credit for only 3 more years. I bought a home about 3 years ago (just 4 years out from my bankruptcy) and now own my own small business.

It can help you turn your life around but please seriously consider alternatives very hard before taking this action.

Some Questions Answered

What are you are going to need to file bankruptcy for yourself?

First you need to collect a complete list of every debt you owe to anyone and I mean everything you owe anyone even if its $10.00 to the local gas station.

Second you are going to have to make a very detailed list of everything you own personally for example I even listed my cat because I didn’t want to miss anything.

You will also need to find valuations somehow on what each item you own is worth.

Third download a copy of the various forms you are going to need I order to file your bankruptcy. This is the point where you are going to have to decide what type of bankruptcy you are going to file.

What are the types of Bankruptcy and what do they mean by Chapters

There are 3 major types and they are named according to the chapters they are defined in US Bankruptcy Law.

Chapter 7 which is a removal of most or all debts, which mean largely a clean slate, though it will remain on your credit report for 10 years. A few of the major exceptions are, if you want to keep a home you own, possibly a car, and additionally student debt is very hard to get rid of. However there are limits to what you can exempt from being seized and sold to pay off your creditors with this chapter for example I believe a 8,000 car and 7.000 in personal items were some of the limits when I filed. Check your local state laws and limits.

Chapter 13 which is mostly a court ordered restructuring of your debts where you will pay back most, or all of your debts in a court ordered payment distributions. Two advantages here is that you get to pay off all your debts and it only stays on your credit for 7 years rather than 10 years.

Chapter 11 which is a business bankruptcy and I will not mention or go into any further because I have no experience personally with this at all.

Personally, I went through Chapter 7 so my information relates directly to that form of bankruptcy but most of this if not all of it should also be relevant to Chapter 13. Chapter 13 will most likely include some sort of payment plan filing in addition the other filings. Part of the reason for choosing Chapter 7 is that I did not own enough property of any type to have it seized and sold in a bankruptcy auction. Which would happen for example if your state has a limit of $10,000 in household items and you owned $20,000 worth of such items.

Long story short, I had planned to go through this form by form. I changed my mind however since I personally didn’t need to file every form and also it’s pretty repetitive.To start out you have a few information sheets about yourself and your debts. Then you have the long lists of every debtor and every possession you own that are organized into various groups as examples.

A few examples are Schedule A which is real property or real estate while Schedule B is personal property like household goods, cars, and even pets, yes I even listed my cat to be safe. Schedule F was a list of the creditors that I had and what my debts to them were and etc.

Some Additional Tips

Make sure you list every debt you owe and all personal property! It’s far better to be too detailed than not have disclosed enough information.

There was the one major mistake I made when I filed. I didn’t include my student loan debt because it’s not typically dis-chargeable without additional hearings. I wrongly assumed that since I was not asking it to be discharged that I didn’t need to list it. I couldn’t have been more wrong on this issue and so I had to file an additional form after the fact with my student loan debt listed. Not a big deal, it was an honest mistake and the court let me fix it. But you don’t want to be making such mistakes if at all possible. However if you do make a mistake it will depend on the judge how he treats you. If you made an honest effort that likely counts for something but it certainly isn’t everything and every judge is different. So be careful whatever you do!

Furthermore, I would like to note that they are very likely to look with a lot of suspicion at your last 6 months of debt. Now if you were making an attempt to pay it down you likely won’t have much to worry about. But you shouldn’t think that you can suddenly max out your credit cards and take out a new line of credit the week before you file bankruptcy. This isn’t likely to be viewed kindly by the court and may be terms to reject your filing.

For valuation of items such as cars, household items and other items the internet can be a very valuable resource. You can find out what items are selling for on used car websites, E Bay, Amazon used books and etc. Because if you own a 100 books that retail at $30.00 each, it doesn’t mean you have $3000.00 in books necessarily. Personally I valued such things at the price I could likely sell them for used and made a good estimate for my large book collection.

To gather all the information and to file out the paperwork in it’s entirely was about 4 hours of work and I worked slowly. I was very careful not to miss anything. I did however have all of my debt filed neatly in a filing cabinet so I had easy access to all of my debt records. If your bills are scattered all over the house or you need to call your creditors to get your information this step could take longer.

Please don't give up hope whether its bankruptcy, another solution, or some combination of actions you can get your money issues under control. You will bounce back, but the first thing you need to do is stop denying there is a problem and start solving it realistically. Good Luck, I know you can do it, you simply have to face the hard choices and then make them. To your future financial success, I wish you the best.

Here are the links I used to file my own bankruptcy provided below and are very well written by the members US Court System.

(Basic instructions)

http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/Bk%20Forms%20Dir%2012...

Bankruptcy forms

http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx

Bankruptcy resources

http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyResources.aspx