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Ask Bankruptcy Attorneys in Johnson County, Kansas: 9 Big Risks of Filing Without Legal Representation

1. Filing the Wrong Chapter

Bankruptcy allows debtors to choose the chapter that most closely aligns with their situation. The logical choices are usually Chapter 7 or Chapter 13. It can be tough, however, to identify which chapter will solve your particular concerns. Each also treats property very differently. Chapter 13 can help save your home from foreclosure, while Chapter 7 can provide a clean slate - if you have low income and no assets. The problem is that in choosing the wrong chapter you position yourself to lose valuable property or remain responsible for burdensome debts. You may even jeopardize your chances of filing. Working with a team of qualified bankruptcy attorneys eliminates doubt and ensures you pick the chapter most appropriate for your circumstances.

2. Ignoring Property Exemptions

Filers often believe they will lose all their assets in bankruptcy. The truth is that federal law allows debtors to retain many belongings. The goal of bankruptcy is to help you get out of crushing debt and again stand solidly on two feet. Taking everything from you is counterproductive, and bankruptcy law largely recognizes this fact.Those belongings you can keep are collectively known as exempt property - as in exempt from the bankruptcy estate. But these must be properly listed and provided to your bankruptcy trustee. Otherwise, you risk losing them altogether. Examples of exempt property include:

3. Failing to Complete the Necessary Classes

Courts in Jackson County, Kansas - and indeed throughout the United States - require bankruptcy filers to undergo credit counseling and debtor education courses. These courses are not negotiable but instead must be completed to successfully file for bankruptcy and receive a discharge. 
The trouble is that filers who go it alone often fail to meet these obligations. Some forget to enroll in the courses, while others fail to realize these courses are compulsory and ultimately jeopardize the opportunity to discharge their debts. An attorney, on the other hand, can keep you on track and help ensure these courses are completed in a timely manner.

4. Neglecting to Complete the Proper Forms

Bankruptcy is driven by paperwork. This means that in addition to completing all the required forms, such as a statement of financial affairs, you'll also need to provide a significant amount of personal documents. Examples include:

Keeping track of the paperwork you've completed versus that which you still need to submit demands time and organization. Omitting any of the necessary forms may delay your case or lead to a complete dismissal. Once again, a lawyer can help you understand what must still be done and move your case in the direction it needs to go.

5. Missing the Meeting of Creditors

Once you file for bankruptcy, you must attend what's known as the meeting of creditors. This allows your creditors and the bankruptcy trustee to ask questions about your case. This meeting is indeed serious business, but it's not a court hearing. Federal laws prohibit the bankruptcy judge from attending, and no legally binding decisions will be made for or against you. 

All the same, the meeting of creditors will be recorded. This means you must provide thoughtful, careful answers to the questions asked of you. You cannot make guesses, as the answers you do provide will be taken into consideration before your bankruptcy is discharged. You must therefore tell the truth. Equally important, if you don't attend the meeting, the trustee will dismiss your case without discharging your debts.

6. Failing to File a Feasible Chapter 13 Repayment Plan

Chapters 7 and 13 provide different solutions to filers. With the latter, a debtor is required to follow a repayment plan that pays back some of their outstanding debts. But it is your obligation to propose the terms of that repayment plan, and the court will then approve or reject the plan after conducting a thorough review. If the trustee or creditors believe the plan isn't feasible, they may object to its confirmation.

When you work with a team of bankruptcy attorneys, you have a much better chance of the court approving your repayment plan. Your attorney will ask questions about your income and debts to develop a payment the court will recognize as fair.

7. Misunderstanding Crucial Concepts

Bankruptcy cases, especially those of Chapter 7, generally follow a predictable course. But this is not a guarantee. Complicated issues might arise that self-represented filers cannot manage. To illustrate, many solo filers:

The bottom line is that as a self-represented filer, you may not know how to respond when an element of your case is challenged. Keep in mind that if your paperwork is not properly filed, or you've omitted some necessary details, the bankruptcy trustee can even allege you've committed fraud. It is for these reasons that an attorney is crucial to your success.

8. Ignoring the Local Rules of Bankruptcy

In addition to following federal laws, bankruptcy filers must also abide by local regulations. Here's an example: to file Chapter 7 in Johnson County, Kansas, you must pass the state means test or have an income below the state median for your household size. 
Your income information will also be used to determine if you can instead repay part of your unsecured debt by filing Chapter 13. This chapter comes with its own requirements, including having a regular source of income and enough disposable money to put toward your repayment plan. Lawyers understand the differences between both chapters and can guide you in choosing the right one for your needs.

9. Neglecting to Properly Prepare

Bankruptcy demands that you properly prepare. Your property must be valued appropriately, including your four-year-old TV and oak bookcases. You must similarly know which debts can be discharged and which cannot. And you must prepare for the questions that will likely be asked of you during the meeting of the creditors. Remember what we said: these answers will be recorded and applied to your case.Your attorney has likely been through a number of similar cases and will help you understand what to expect at every step. To illustrate, they'll ensure you disclose and realistically value all of your assets. They'll also use exemption rules to protect as much of your property as possible. Last but not least, your attorney will work to discharge the maximum number of debts.When done properly, bankruptcy can provide the fresh start you need. But filing by yourself poses pitfalls that can derail your entire case. You must know which chapter to file, how property exemptions work, and the best way to calculate a repayment plan (if applicable). An attorney can eliminate the guesswork involved with these and other tasks - and help you meet the court's many demands. Contact Stockton & Stern, LLC, today to schedule your consultation.