Filing for bankruptcy — should you do it yourself?

I always get a kick out of debtors who go on legal advice sites and ask attorneys whether they should handle their own bankruptcy case.

We lawyers are all in the same union, so the answer is invariably some version of “NO” although the reasoning and justification may change between different attorneys.

Still, bankruptcy debtors are by definition in a tough financial bind, and the opportunity to bypass paying a substantial attorney’s fee for some will prove irresistible.

The plain truth is that there are undoubtably some debtors out there who have cases simple enough to consider filing by themselves, as well as the skills and temperment to do so. Do you think you may fall in to that category?

The first thing I look over when a potential new client comes in to my office is their tax return. I always check to see if the return was prepared by H&R Block, Joe the CPA, or the like. That’s my “tell” to see if the client could possibly pull off a “pro-se” bankruptcy without damaging his sanity or wallet. If someone is going to H&R Block to have a 1040EZ tax form filled out, I would venture there is virtually no chance that the same person could get through all of the bankruptcy forms correctly without driving themselves crazy.

Think about it for a minute. Taxes are filled out on government issued forms, and cover the taxpayer’s income, along with certain specified deductions which may be subtracted.

Bankruptcy cases are also filled out on government issued forms and require income to be declared and calculated in specified ways. But with bankruptcy, that is just the beginning. There are a blizzard of additional forms requiring listing of assets, as well as debts, and monthly expenditures as well. The amount of form-filling exceeds the typical tax return by a factor of four in most every case.

So, if you are hiring someone to do you taxes, it is almost certain that hiring someone to do your bankruptcy will be money well spent. The purpose of filing a bankruptcy case is to return to a level of peaceful normal living; most folks will find driving themselves crazy with forms trying to get there is a form of false economy.


By Doug Beaton

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