Do I really need a lawyer to file for bankruptcy?

Published Monday, April 20, 2009 @ 3:30 pm

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The answer to that question is a most emphatic YES. One of the great fictions of living in this society is that “lay” persons can conduct all of their own legal affairs. Unfortunately, the law is complicated, gets more complicated every day, and there is little room for error. In almost every area of law, not knowing the law does not excuse liability. What does all this mean to you? Just like you wouldn’t buy “Open Heart Surgery for Dummies” to take care of that pesky aortic valve aneurysm, you shouldn’t proceed in the dark when your financial life requires a major operation.  You should definitely learn as much as you can about any major life decision you undertake, so buying some books to guide you through the process isn’t a bad idea. However, it simply isn’t enough. If you try to prepare your bankruptcy yourself, you may―actually, you almost certainly will―run into major trouble. And if you mess up, the law will not care about how innocently you committed a mistake. It doesn’t matter how smart you are, bankruptcy law is now more complicated than ever. Don’t take chances―hire an expert.

Don’t settle for a general practitioner either. When you file for bankruptcy you need a bankruptcy attorney. To go back to our medical analogy, would you go to a dermatologist for a kidney transplant? He had to know something about kidneys to become a doctor, but probably not the nuances of performing surgery, and he certainly won’t have the requisite experience. In bankruptcy law, as in so many things, the devil is in the details.

The claim that bankruptcy law is now more complicated than ever isn’t just what legal casebooks would call “mere puff”―Congress passed the Bankruptcy Abuse Reform Act in 2005 and bankruptcy law scholars and judges still can’t make sense of it all. Simply stated, the “routine bankruptcy” no longer exists. Even if someone close to you has assured you that they filed themselves without a problem, your situation could be radically different in ways you will not be able to appreciate. In fact, the exact same person might have filed for a bankruptcy in 2004 that would be totally different today. You need a bankruptcy lawyer because he will understand your situation and how it fits into the law, he will know your local bankruptcy court, and he will be keeping up with new developments and changes in the law of his specialty; it is his professional responsibility to do so.

If you are thinking of filing under Chapter 13, your payment plan will be much more likely to succeed if you have a lawyer. If you are trying to figure out what you’ll be able to keep and what you’ll lose, a good lawyer will help you maximize the former and minimize the latter. Once you commence proceedings, there are certain actions you definitely want to take and others you certainly want to avoid. But before you even get to that, consider this: bankruptcy can be an intimidating process; don’t you want to start with a trusty ally by your side?  That is exactly what a good bankruptcy a lawyer will be to you. 

American law is an adversarial system, and almost every other player in the bankruptcy game will have an advantage over you. Big creditors deal with thousands of bankruptcies, you will probably only deal with one in your whole life. Creditors have their own lawyers to represent their interests, and you should, too. Don’t start a bankruptcy off on the wrong foot―this one is a no-brainer. Hire an experienced bankruptcy attorney.

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