Has anyone here successfully file their own Chapter 7 bankruptcy?

Jeffrey L. Shurtliff

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Dec 4, 2010
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I'm considering doing this to save on attorney fees, but I wanted feed back pro and con from the forum. I'm looking at this site: Chapter 7 Instructions File Bankruptcy Petition Packet Yourself but I may just download the forms from the public library database if I decide to proceed.

So has anyone done this themselves?
I am in favor of people representing theirselves however when it comes to bankruptcy see an attorney definitely. Bankruptcy is stressful enough without someone representing you. You must cover all of the debt bases with you bankruptcy. I would never get a download from the website link you have posted.
 

selphie

LoanSafe Member
Jul 18, 2008
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Thank you. Kind of what I thought I'd hear anyway. I filed my own Pro Se responses when my house ended up in foreclosure, but I may be over my head with this.
 

mrange25

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Nov 1, 2009
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When I filed Chapter 7 I hired an attorney. But I do remember showing up in court, and there being about 15 people in front of us that were also filing bankruptcy. I remember one lady told the judge she filed the bankruptcy herself and didn't have an attorney. Interesting enough, the judge asked her if she had filed bankruptcy before and she said yes. So she may have felt more comfortable doing it on her own since she has filed multiple times.So I know it's possible, however as jeff said, imagine it would be extremely stressful and time consuming (especially appearing before the judge, etc). Especially if its your first time filing bankruptcyWhen I was shopping around for a bankruptcy attorney and asked an attorney about doing it yourself. His quote was "You can peform brain surgery youself, but would you want to?"
 

RightOnTime

LoanSafe Member
Sep 27, 2011
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On bkforum, it seems like trustees go a little harsher on pro-se filers. If your case is cut and dry, I might chance it. Otherwise, it might be good to at least get a free consultation if you're not sure about it.
 

selphie

LoanSafe Member
Jul 18, 2008
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I've opted to file 13 so that I can have the second mortgage stripped from the property. Also it appears that BOA is finally budging and allow homeowners to negotiate the principle on primary loans (per an NPR report I heard today). I'm aiming to file around Feb / March. I'll try to report back once I'm done.

I think the mental block I was having was with filing CH 7. After talking to another attorney I feel more comfortable filing 13 for my particular situation and financial goals.
 

calgirl67

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Sep 2, 2009
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We hired an attorney but ours was a complex case.

If we were under the median income = no means test, we would have filed ourselves but used a petition preparer ($125) to prepare the docs correctly so it didn;t get dismissed by the court.

Petition preparers CANNOT give you legal advice or decide wich chapter is right for you. Your options are consult a BK attorney to see which chapter would suit you best, buy the Nolo BK books and hire a petition preparer to do the docs.

I know a few people who used petition preparers and they did fine.
 

TomEason

LoanSafe Guide
Jun 18, 2009
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selphie

Thanks for your post. Since you plan on asking the BK court to strip your 2nd, I presume you know that, pursuant to the Bankruptcy Reform Act of 2005, a BK court cannot strip a 2nd on a primary residence in Ch13. So, you'll need to move out, then rent your place; a strip is allowed on a rental (business) property.
 

despritfreya

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Sep 8, 2011
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Since you plan on asking the BK court to strip your 2nd, I presume you know that, pursuant to the Bankruptcy Reform Act of 2005, a BK court cannot strip a 2nd on a primary residence in Ch13. So, you'll need to move out, then rent your place; a strip is allowed on a rental (business) property.
With all due respect, this is why OP needs the assistance of counsel.

1. BAPCPA does not stand for the proposition that one cannot strip off a wholly unsecured mortgage on a residence. Quite the contrary is true.

2. Advising someone to move out of their residence and turn it into a rental (on the eve of bk) so that one can accomplish a cramdown (different than a strip off) is bad advice. Manipulating the system like this would be bad faith and, perhaps, perpetrating a fraud upon the creditor and the court. Now, if someone moved out of their home and turned it into a rental long before filing, without the requisite intent to screw the creditor, that would be a different story.

Des.
 

Jeffrey L. Shurtliff

LoanSafe Member
Dec 4, 2010
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With all due respect, this is why OP needs the assistance of counsel.

2. Advising someone to move out of their residence and turn it into a rental (on the eve of bk) so that one can accomplish a cramdown (different than a strip off) is bad advice. Manipulating the system like this would be bad faith and, perhaps, perpetrating a fraud upon the creditor and the court. Now, if someone moved out of their home and turned it into a rental long before filing, without the requisite intent to screw the creditor, that would be a different story.

Des.
Des...............I have a comment about this statement. I agree poster needs an attorney.
What I want to say here is the individual person responds to the "system", as the system affects them. If a system is corrupt within and the government is also corrupt; of which controls the system, what would one expect from the individual and would such a fraud really be relevant to a fraud? Fraud is a nasty word and is very hard to prove in the courts. I do not know what what you do in life, or how set up you are, but know this if you don't know; people are emotionally distressed over the negligence of the banksters and they are reaching out and they must be helped. People are desperate. The system has affected people to come to this site to get help. This is my two cents.............Jeffrey
 

despritfreya

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Sep 8, 2011
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What I want to say here is the individual person responds to the "system". . . If a system is corrupt. . . what would one expect from the individual. . . Fraud is a nasty word and is very hard to prove in the courts. . . (P)eople are emotionally distressed over the negligence of the bank. . . and they are reaching out and they must be helped. The system has affected people to come to this site to get help.
(Emphasis added.)


1. Just because one thinks, right or wrong, that the system is corrupt, one should not stoop to such level. What is the old adage. . . "two wrongs do not make a right".

2. People are emotionally distressed and do come seeking help. Such is exactly why they need to be led down the correct path and given information that is not going to make their lives more of a mess.

3. Fraud (civil, not criminal) is nasty and difficult to prove however, why would one even want to go down that path?

4. As it relates to what I do in life and converting a homestead to rental property, I can tell you that the 1st thing the lender asked in a recent case my firm was handling was, "So. . . when did the debtor move out?". Can tell you that the answer was "two years ago and that is when the property was turned into a rental". With that in mind, we have just finalized a stipulated cramdown of the property and are on the verge of confirming the 11 Plan. So, don't think that the lenders have no clue. They know how this is played and are more likely than not to catch any debtor who attempts to "game" the system. I, as debtor’s counsel, have a duty to make sure my advice is to take the "high road". As one astute judge recently stated in a ruling, "About half of the practice of a decent lawyer consists of telling would-be clients that they are damned fools and should stop".

Des.
 

Jeffrey L. Shurtliff

LoanSafe Member
Dec 4, 2010
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(Emphasis added.)


1. Just because one thinks, right or wrong, that the system is corrupt, one should not stoop to such level. What is the old adage. . . "two wrongs do not make a right".


Yes that is a correct quote of the adage, however I was stating as the system has gotten corrupt over the years and people have gotten used to dealing with a corrupt system.


2. People are emotionally distressed and do come seeking help. Such is exactly why they need to be led down the correct path and given information that is not going to make their lives more of a mess.

People make their own decisions in this mess most just want to vent. This site as far as being perfect is far from it but it is pretty much right on advice in alot of these threads.

3. Fraud (civil, not criminal) is nasty and difficult to prove however, why would one even want to go down that path?



I agree wholeheartedly.



4. As it relates to what I do in life and converting a homestead to rental property, I can tell you that the 1st thing the lender asked in a recent case my firm was handling was, "So. . . when did the debtor move out?". Can tell you that the answer was "two years ago and that is when the property was turned into a rental". With that in mind, we have just finalized a stipulated cramdown of the property and are on the verge of confirming the 11 Plan. So, don't think that the lenders have no clue. They know how this is played and are more likely than not to catch any debtor who attempts to "game" the system. I, as debtor’s counsel, have a duty to make sure my advice is to take the "high road". As one astute judge recently stated in a ruling, "About half of the practice of a decent lawyer consists of telling would-be clients that they are damned fools and should stop".

Des.
I am glad you hold your job in high esteem and want to do it right...............Jeffrey
 

TomEason

LoanSafe Guide
Jun 18, 2009
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SF Bay Area CA
despritfreya

Thanks for your post.

FYI, I’ve made no mention of the timing. Your implication is that I've advised OP to commit fraud. You state “on the eve of bk”, but I never specified a time. I made my post as a caveat and a suggestion that OP might conduct further research, which includes consulting a BK lawyer.

I wouldn’t even begin an attempt to address all facets of consumer bankruptcy law. There have been volumes written on the subject. And although there are many competent consumer BK lawyers, unfortunately there are also lots of bad ones out there.

Upon further research, I’ve found that the lien stripping provision is available in some federal districts, but not others. So, we are both partially right and partially wrong, LOL.

Limitations on lien stripping

The Bankruptcy Code prohibits the stripping of voluntary liens secured only by the debtor's residence. Thus under-secured mortgages on the debtor's home cannot be reduced to the present value of the property, as can liens on some vehicles, etc.

However, the circuit courts of appeal are split on whether a voluntary lien on the debtor's residence that is not secured by any value (i.e. the senior liens equal or exceed the value of the property) can be stripped.

In the 9th Circuit , which includes California, liens can be stripped if there is no value securing the mortgage sought to be stripped.
Since many, if not most, members of Loansafe are in CA and other 9[SUP]th[/SUP] Circuit states, those members can be assured that a Ch13 lien strip is possible but certainly not a slam dunk. The Ch13 BK court procedure is complex including several procedures. And of course the filer must complete their Ch13 plan to be eligible for the strip at discharge.
 
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despritfreya

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Sep 8, 2011
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I’ve made no mention of the timing. Your implication is that I've advised OP to commit fraud. . .
I apologize, I did not mean to offend.

Timing may or may not be an issue. What is the issue is "state of mind". For example, since I know the ins-and-outs of bk law, I could play the game and wait a long time to file. But, I’d better be careful since those around me in the bk field (especially creditor attnys) are aware of my understanding of the law - might be very easy to show my "intent".
 
The Bankruptcy Code prohibits the stripping of voluntary liens secured only by the debtor's residence. Thus under-secured mortgages on the debtor's home cannot be reduced to the present value of the property.
This is true and has been the law since 1998.
 
However, the circuit courts of appeal are split on whether a voluntary lien on the debtor's residence that is not secured by any value (i.e. the senior liens equal or exceed the value of the property) can be stripped.
Again, with all due respect. . . In the context of a Chapter 11 or 13, the above is not correct. Every appellate court that has addressed this issue has allowed the strip off. The question is. . .

Does 11 U.S.C. 1322(b)(2) prevent a debtor from modifying the rights of junior lienholders of liens on his principal residence if the value of the residence is less than the amount owed to the senior lienholder?:

1st Circuit - No. In re Mann, 249 B.R. 831 (1st Cir. BAP 2000)
2nd Circuit - No. Pond v. Farm Specialist Realty, 252 F.3d 122 (2nd Cir. 2000)
3rd Circuit - No. McDonald v. Master Fin. Inc, 205 F.3d 606 (3rd Cir. 2000)
5th Circuit - No. In re Bartee 212 F.3d 277 (5th Cir. 2000)
6th Circuit - No. Lane v. W. Interstate Bancorp 280 F.3d 663 (6th Cir. 2002)
8th Circuit - No. Fidette v. Keller (8th Cir., 2011) - can’t locate the cite
9th Circuit - No. Zimmer v. PSB Lending Corp, 313 F.3d 1220 (9th Cir. 2002)
10th Circuit - No. In re Griffey, 335 B.R. 166 (10th Cir. BAP 2005)
11th Circuit - No. Tanner v. FirstPlus Fin., Inc 217 F.3d 1357 (11th Cir. 2000)

As far as I can tell only the 4th and 7th Circuits do not have appellate decisions on the ability of a debtor to strip off a wholly unsecured lien on the principal residence - in a Chapter 13. However, all of the lower level published decisions that I looked at allowed it. That is not to say I looked at all of them. I didn’t.

My intent is not to offend anyone. But for my "issues" with this thread, posts are excellent and appreciated. I just want readers of this wonder forum to understand that they can get rid of liens if the situation calls for it.

And with this, I will end my comments. (smile face did not come out)

Des.
 
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acesfull

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Nov 5, 2008
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Hi Des

Welcome to loansafe. I feel this board will be greatly served in having attorney's giving there time and opinions. So welcome again.

If I may ask. Is bankruptcy your main area of expertize? Foreclosure Defense? Do you practice in a judicial or non judical state?

I look forward to your reply.

Best regards

Nj-16 Months
Acesfull/HWP
 

acesfull

LoanSafe Member
Nov 5, 2008
2,216
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NEW JERSEY
With all due respect, this is why OP needs the assistance of counsel.

1. BAPCPA does not stand for the proposition that one cannot strip off a wholly unsecured mortgage on a residence. Quite the contrary is true.

2. Advising someone to move out of their residence and turn it into a rental (on the eve of bk) so that one can accomplish a cramdown (different than a strip off) is bad advice. Manipulating the system like this would be bad faith and, perhaps, perpetrating a fraud upon the creditor and the court. Now, if someone moved out of their home and turned it into a rental long before filing, without the requisite intent to screw the creditor, that would be a different story.

Des.
What is the required time frame needed to qualify in order for a debtor to not appear like they are manipulating the system?

Best regards

Nj-16 Months
Acesfull/HWP
 

despritfreya

LoanSafe Member
Sep 8, 2011
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Acesfull,

In response to:

Is bankruptcy your main area of expertize? Foreclosure Defense? Do you practice in a judicial or non judical state?
Bk attny in a community property state - both judicial and non-judicial but 99 percent of foreclosures are non-judicial.

What is the required time frame needed to qualify in order for a debtor to not appear like they are manipulating the system?
Cannot answer this as it goes to mind set. Certainly the longer one waits the less likely requisite mind set can be proven, and, of course, the less likely the lender will raise the issue. The most recent case we handled with the issue of rental vs. homestead was a 2 year window. Is 2 years definitive? No, but it helped - shut the lender's argument down the moment we explained the situation and it saw the answer to question 15 in the Statement of Financial Affairs. And. . . of course. . . the client had no mind set to do the cramdown two years ago. Client had moved closer to work and could actually make a few bucks by renting out the home.

Des.
 

Jayme Proctor

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May 5, 2015
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If you are considering a chapter 7 bankruptcy, figuring out how much you'll have to pay your Bankruptcy Lawyer can be another source of stress. While every case is different, it's helpful to have a ballpark figure for what you can expect to pay a bankruptcy attorney to represent you in a chapter 7 case. If you see advertisements that promise unusually low attorneys fees for your area, be on alert. The advertisements might be deceptive. Often the attorney increases the quoted fee once you start the bankruptcy process. For example, the attorney might say he or she must charge you more because you have more than a threshold number of creditors, your debt is over some predetermined limit, or you are filing jointly with your spouse. However, these factors rarely make a Chapter 7 bankruptcy more complicated so do not usually justify a higher fee.