File Bankruptcy Without a Lawyer?

We seem to live in a world these days where everyone, banks, governments, utility companies and service companies are all looking for new ways of taking more and more of our hard earned cash.

This can seem particularly annoying when one is struggling financially already, and the increased cost of living simply serves to rub more salt into the financial wound.

Bankruptcy should only be considered when all other methods of financial survival have been completely investigated and found impossible. All too often companies with a financial interest in sorting out your bankruptcy for you, who advertise in the papers and on TV, make it seem all too easy to get out of debt, never revealing the truth about life after bankruptcy.

 However, once bankruptcy is decided upon as the only real solution to one's financial situation, the somewhat confusing world of bankruptcy law is entered.

OK, so in this online world, everything is possible, or so it seems, and one can just download the various bankruptcy forms, or just walk into the nearest court, but it's not always that simple.

There are a number of different types of bankruptcy, and each depends on ones circumstances. A lawyer has both local knowledge of the courts (some aspects of bankruptcy are not universally agreed, some judges vary in their opinions)

The most common are chapter 7 and chapter 13. Around 90% of filings are made under chapter 7, making this the most popular form of bankruptcy. This involves the court selling virtually all of one's possessions, with the proceeds distributed amongst the creditors. Any shortfall is no longer the responsibility of the bankrupt, who effectively walks away debt free.

Chapter 13 is a 3-5 year repayment plan, where the court reschedules debt repayment and no assets are sold. The bankrupt simply has to maintain monthly repayments.

This all sounds great, but under chapter 7, people are required to complete a means test, to demonstrate that they cannot afford to repay any debt. This is because the system was abused for many years by people using chapter 7 to rid themselves of debt, when they could, in fact, have afforded to repay, even given that the terms of a repayment (chapter 13) bankruptcy can leave the debtor with little spare cash.

And there is the start of the problem. You need to think with a clear head about your options. Often, under severe financial pressure, it is difficult to think clearly, and the easy route may not be the best for someone in the longer term.

In addition, once the bankruptcy route is decided upon, various information has to be produced and filed with the court, and deadlines and meetings have to be met and attended.

The fact is, although filing bankruptcy without a lawyer may seem very tempting, and certainly money saving, it could cost you dear in the long term. You need someone with a cool head, removed from your situation who can analyse your financial position and decide which is the best course of action in your case. By going bankrupt, you risk losing everything, not just debt and therefore an expert should be used.

Having done that, they can then lend practical help to all the form filling and presentation you need to best present your case.

Finally, always use an accredited lawyer, not a deputy or legal secretary and check their fees up front. Some will charge on a time basis, others a flat fee, but get some idea as to what they will charge before you hire them.

Bankruptcy should always be entered into as a last resort, and with a lawyer!