Bankruptcy in Brief

Most common mistakes in pro per filings

The bankruptcy paperwork looks simple on its face.  Individuals are tempted to do it themselves either assuming that they can't afford a lawyer or that they don't have anything to lose.   Do-it-yourself blunders include:

• Exemptions are not selected or applied to preserve assets
  
• Property is omitted from the schedules
      Debtors forget to schedule intangibles like stock options, partnership interests;  interest in pending probate estates;  trust funds; lawsuits, filed or potential;  tax refunds; or retirement funds.
  
• Creditors are omitted, either because debtors think that only a certain kind of creditor can be discharged, or omit a creditor because they want to repay the debt.
  
• Debtors get "cute" about transferring assets to others before filing or deliberately not disclosing assets, on the grounds "no one will know"  
  
• Schedules underestimate living expenses suggesting that the debtors have ample money to fund a Chapter 13 plan See substantial abuse.

These mistakes can lead to the loss of assets that could have been saved for the debtors, to less relief than was available by law,  or, in extreme cases, to denial of the debtor's discharge under §727.

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References