A Cautionary Tale for Bankruptcy

Over the last 32 years, I have encountered any number of people who had heard that “you don’t need a lawyer to …,” so, they did. This is particularly true in the Bankruptcy area. You do not need a lawyer to file petitions for government relief. But, doing something because you “can” is not the same as doing what you “should.”

In the Bankruptcy context, many people do their own research and, deciding that they can file without meeting any particular test, they think that filing is “free” and they “won’t get in trouble” for just filing a petition. This is usually done on the day before a foreclosure or repossession. The debtor feels a particular sense of victory over the creditor who is suddenly stopped cold in their tracks.

But, beware, there are two things everyone has to remember when accessing bankruptcy protection. First, the Bankruptcy Petition/Schedules are statements made under oath. What this means is that you can go to jail for lying and you can be sued for fraud if you don’t tell the whole truth. The door looks easy to open, but just touching the doorknob makes you extra responsible for telling the complete truth.

The second thing to bear in mind is that the set of forms represent volumes of law that look more like a maze when viewed from above than like the doorway you see at the Petition stage. A few hours on the internet, or a casual experience base with the forms, does not provide a bird’s eye view. It takes Bankruptcy specialists years of law school to begin their training as competent professionals in these areas. This means that it is possible to “tell the truth” and still be “lying” because you do not know what the law says the form is actually asking you. The result can be denial of your petition, dismissal of your case with prejudice to refilling, or even prosecution by the U.S. Attorney for Bankruptcy crimes. In the case of Bankruptcy, having competent legal advice is important.

Scroll to top