Dealing with creditors can be taunting enough, but debtors can also be victimized by unscrupulous practices by those who assist them in preparing their bankruptcy petitions. The U.S. Department of Justice has a division dedicated to overseeing the bankruptcy process in federal courts. This division is called the Office of the United States Trustee.
The Office of the United States Trustee warns debtors that sometimes fraudulent bankruptcy petition preparers claim to be affiliated with non-profit groups or even the government, and sometimes they even claim to be affiliated with attorneys but are not. In some extreme cases, these preparers may draw a debtor into a fraudulent scheme where the debtor’s bankruptcy papers are falsified to include assets that do not belong to the debtor.
Cognizant of these practices and the complexity of bankruptcy laws, the bankruptcy court warns individuals who file a bankruptcy case without an attorney or “pro se.” It is extremely difficult to do it successfully. It is very important that a bankruptcy case be filed and handled correctly. The rules are very technical, and a misstep may affect a debtor’s rights and could possibly lead to loss of property. For example, a debtor whose case is dismissed for failure to file a required document, such as a credit counseling certificate, may lose the right to file another case or lose protections in a later case, including the benefit of the automatic stay.
The court further warns debtors to consult an attorney if any of the following applies:
• You have tax debts, student loans or liens on your property
• You own property with equity
• You own your own business
• You have filed for bankruptcy before
• You want to avoid an eviction or foreclosure
• You have questions about which debts will be discharged
• You want to avoid having your wages garnished
• You have any property you do not want to lose
Looking at this list, one may conclude that no one should file for bankruptcy protection without an attorney representing them. I think that’s the court’s point. There is too much at risk to proceed without legal representation.
For a free initial consultation regarding debtor’s rights or other related matters, please contact Susana B. Tolchard at 661-287-9986.