One of the first questions we are asked about bankruptcy is entirely legitimate, ”how can I afford an attorney if I’m bankrupt?” The very reason for considering bankruptcy in the first place means that folks are (and should be) very particular about attorney fees. So how should one go about dealing with the fee issue?
For starters, filing bankruptcy “pro se” (without an attorney) is certainly permitted by law. We have seen it done many times, sometimes successfully, especially if it’s a chapter 7. If you know most of the common issues, and if you have a knowledgeable person assisting you, we think you will succeed about half the time if it’s a chapter 7. Therefore, your decision needs to consider the likelihood of successful outcome and the cost if it doesn't turn out so well.
Most often, we believe you should still get an attorney even if it's a straightforward chapter 7. Our concern is that often you don't really know if not hiring a lawyer was a mistake until after the fact. The sheer magnitude of the cost of some mistakes often dwarf the attorney fee. (Most attorneys, including our firm, can get you in and out of most chapter 7 cases for a fee of under $2,000, which although is still a lot, it’s smaller than the cost of many common mistakes).
Are there any exceptions? Is it ever “non-crazy” to consider filing pro se? Rarely, but yes. In our view, if you happen fit the following profile, then perhaps you should at least look into doing a straightforward chapter 7 on your own:
You have a relatively high tolerance for risk. You’re the kind of person, for example, who would be genuinely comfortable electing to not have any insurance on a home you own. You feel good about the savings more than you lose sleep over the risk.
You’re good at numbers, and you’re good at understanding how to read complex instructions. For example, you prepare relatively complex tax returns without needing help from a tax specialist, and you’re confident that you will get it right.
Your own time is not expensive: The time it takes for even fast learners to adequately understand the relevant laws, prepare the forms, and ascertain that nothing is left undone can be significant and should be factored in.
Even if all of the above exist, your decision to go pro se on your straightforward Chapter 7 consumer case should be made only after careful evaluation and reflection. Here is a list of what you should know if you chose to move forward on your own.
What about Chapter 13? We think you should never go a Chapter 13 alone. I have never seen a chapter 13 case, filed in good faith and lasting longer than a few months, where I thought the Debtor was made better off financially because they saved on attorney’s fees. If filing the Chapter 13 is the right decision, then we believe it is always worth it to get a competent and honest attorney to represent you. No exceptions in chapter 13; you can file pro se, but you really shouldn’t.
I believe there are times when we as society are overly concerned. Sometimes we over-purchase warranties and even insurance. However, when it comes to filing for bankruptcy, it is not being overly cautious to seek competent legal counsel who knows not only the law, but the local practices and procedures in San Antonio.