4 Potential Dangers If You File Bankruptcy Yourself

You can file bankruptcy yourself. However, there are 4 serious and potential dangers if you file bankruptcy yourself. Many dangers can include your bankruptcy petition being dismissed.

Potential Danger 1: Filing the Wrong Bankruptcy Chapter

Personal bankruptcy consists of two bankruptcy chapters. Chapter 7, for individuals with unstable income, allows some unsecured debts (medical and credit card bills) to be legally eliminated or wiped out in approximately four months. This means that you won’t owe creditors. Chapter 13, for people with stable income, requires secured and unsecured debts to be repaid over three to five years. However, you can’t choose the chapter you want to file. If you do and it’s the wrong chapter, then your bankruptcy petition can be dismissed.

Potential Danger 2: Filing Incomplete or Incorrect Bankruptcy Forms

There are many bankruptcy documents required when filing bankruptcy. However, when filing bankruptcy yourself you can forget—or not know—to include vital information. The important type of information that you may inadvertently or purposefully omit such as property, money you have coming to you or stock options can cause you serious trouble. The forms must be completed properly for your bankruptcy case to be confirmed or approved by the U.S. Bankruptcy Courts. In other words, filing inaccurate or incomplete bankruptcy forms can lead to your case being dismissed, according to Nolo.

Potential Danger 3: Hiding Assets

The U.S. Bankruptcy Courts prohibits you from trying to hide or transfer assets such as homes, cars or money before filing bankruptcy. Although you may not want the assets included in your bankruptcy petition, hiding them is not an option. If the bankruptcy trustee finds out about your actions, your case will be dismissed. You may also be prosecuted for fraud.

Potential Danger 4: The Bankruptcy Trustee May Delay Your Case

Before your bankruptcy petition is confirmed or approved, you’ll have to attend the 341 meeting or meeting of the creditors. At the meeting of the creditors, your bankruptcy trustee may postpone the meeting and request you obtain legal counsel to represent you.  

Seek Legal Help When Considering Bankruptcy

Personal bankruptcy is the legal process which allows you to repay or eliminate some or all of your unsecured and secured debts under the protection of the U.S. Bankruptcy Courts. Therefore, it is best that you consult a lawyer specializing in bankruptcy. The bankruptcy lawyer will explain the process and make sure that you qualify for the bankruptcy chapter you want to file.