Written by Craig D. Robins, Esq.
As long as a debtor is honest and straight-forward with their bankruptcy attorney about the facts of their case, and as long as the bankruptcy attorney is experienced and qualified to handle the case, there is very little that can go wrong with a consumer’s typical Chapter 7 bankruptcy filing.
Based on my experience, the following situations are where a debtor can get into trouble:
Reason #1: The debtor does not advise the attorney of all of their assets and liabilities and other information, and as a result, the petition is not accurate. If a trustee learns that the debtor withheld important information, the trustee can object to the debtor’s discharge.
Reason #2: The debtor does not use a bankruptcy attorney and instead files a pro se petition. Bankruptcy law, practice and procedure is complicated enough for bankruptcy lawyers; it is even more difficult for the lay person to understand everything that is necessary for a bankruptcy case to go smoothly.
Even if a debtor can prepare the petition on his own, there are still so many requirements under the new bankruptcy laws that it is very difficult to comply with all of them without knowing all of the particularities of the law. The bankruptcy court throws out many pro se bankruptcy cases because the pro se debtor does not do what they are required to do.
Reason #3: The debtor employs an attorney who is not experienced in bankruptcy law. As indicated above, bankruptcy law has become rather complex and complicated and can result in a mine field of traps and pitfalls for the unwary. I’ve personally seen many, many debtors get into trouble because their bankruptcy petitions were filed by general practitioners who were not sufficiently versed in bankruptcy law.
Knowing what assets are protected, knowing what documents must be filed and how, and knowing relevant deadlines are all very important aspects of practicing bankruptcy law which are not that easy to grasp for those who do not regularly practice in the bankruptcy court.