If You File a Chapter 7 Bankruptcy with an Attorney, You Enhance Your Chances of Getting a Discharge

Posted by Kevin on September 20, 2018 under Bankruptcy Blog | Comments are off for this article

Over the years, I have received numerous phone calls from people who have tried to file a bankruptcy by themselves (known as “pro se” debtors) and have gotten into trouble.   I also see first hand what happens when people file without an attorney when I attend “meetings of creditors”, also known as 341a meetings.  A 341a meeting is the usually straightforward, usually short meeting with the bankruptcy trustee that everyone filing bankruptcy must attend.  Unfortunately, with many pro se debtors, the 341a meeting is not always straightforward or short.

But I wondered whether anybody has actually investigated this question. In searching the internet, I came across a book published a few years ago titled  Broke: How Debt Bankrupts the Middle Class.  This book is a series of articles about current issues in bankruptcy.  One such article is titled  “The Do-It-Yourself Mirage: Complexity in the Bankruptcy System” by Professor Angela K. Littwin of the University of Texas School of Law.  Professor Littwin  analyzed data from the Consumer Bankruptcy Project, “the leading [ongoing] national study of consumer bankruptcy for nearly 30 years.” Her finding: “pro se filers were significantly more likely to have their cases dismissed than their represented counterparts.”

Very interestingly, she also learned from the data that

consumers with more education were significantly more likely than others to try filing for bankruptcy on their own, but that their education didn’t appear to help them navigate the process.  Pro se debtors with college degrees fared no better than those who had never set foot inside a college classroom.

She concluded that after bankruptcy law was significantly amended back in 2005 in an effort to discourage as many people from filing, “bankruptcy has become so complex that even the most potentially sophisticated consumers are unable to file correctly.”

Almost 10 Times More Likely to Get a Discharge of Your Debts

In another study, Prof. Littwin stated that “17.6 percent of unrepresented [Chapter 7 “straight bankruptcy”] debtors had their cases dismissed or converted” into 3-to-5-year Chapter 13 “adjustment of debts” cases.  “In contrast, only 1.9 percent of debtors with lawyers met this fate.”  Even after controlling for other factors such as “education, race and ethnicity, income, age, home ownership, prior bankruptcy, whether the debtor had any non-minimal unencumbered assets at the time of the filing,” “represented debtors were almost ten times more likely to receive a discharge than their pro se counterparts.”

The bottomline is that you are better off going to an experienced bankruptcy attorney.