Another 341 Meeting of Creditors and another pro se debtor who I had to watch crash and burn. This time, a very competent pro se debtor was not aware that by taking an exemption on his home, he was not entitled to an exemption on his cash.
He will be losing ¾ of his 2012 income tax refund.
It always pains me to watch it happen as that strong desire to save some money usually results in lost assets or a large payout to the trustee.
I have talked previously about how risky it is to file bankruptcy without a lawyer and described the circumstances of a sad case where a pro se filer put her family’s home at great risk.
I truly believe that people do not understand the risk when they go into bankruptcy alone.
Bankruptcy is a complex web of Federal and State laws spun around confusing court decisions. On top of that, there is the human element that most competent bankruptcy attorneys factor into their case decisions.
For the 100th time, bankruptcy is not “just some forms that need to be filled out and filed with the court.”
You see, paying a bankruptcy attorney is not a pre-filing cost. It is an investment in your financial future.
Pre-filing Predictability
With an experienced bankruptcy attorney, your case will most likely be decided at the initial consultation. Without an attorney, you are basically jumping without a parachute and hoping for a positive outcome at the 341 Meeting of Creditors, assuming it gets that far.
I can usually give a debtor a clear picture of how their case will progress after the initial consultation so there will be no surprises.
Mark Markus does an excellent job explaining how most case problems are anticipated and resolved well before filing.
In my opinion, even the most sophisticated pro se debtor is not equipped to engage in proper pre-filing planning.
Unfortunately, this pre-filing planning is the most important step to reaching discharge and your fresh start.
The Calm Before the Storm
Your bankruptcy case should be boring, anticlimactic and virtually stress free. Your attorney not only helps you navigate the bankruptcy code, but also helps you steer your emotions through what could otherwise be a stressful process.
More importantly, there should be little to no conflict in your bankruptcy case.
Cathy Moran explains how the progression of your bankruptcy case is a yoga session rather than a boxing match.
This is an amazing analogy.
If the bankruptcy process is akin to yoga, your bankruptcy attorney is the yogi. He/she should guide you through what is normally a peaceful, predictable and stress free process.
Your bankruptcy attorney helps minimize the adversarial aspect of bankruptcy.
So while attorneys do charge a fee, it is impossible to place a value on this.
Paying an attorney to guide you through the bankruptcy process is an investment in your sanity, peace of mind, case harmony and most importantly, your financial future.
Image courtesy of sazzy (Flickr).