Bankruptcy is the state of being unable to meet or pay outstanding debts. In the current economic environment, many people have been forced to file for bankruptcy over the past few years. Some people complete this process on their own and are called “pro se” filers. Others seek the guidance of lawyers or other financial and legal specialists to aid them in the filing process.
There are normally two different reasons which can make someone want to file his or her own bankruptcy. The first is when his or her case is simple and straightforward, and they see no need to hire an attorney. Most often, they are attempting to avoid all the expenses associated with hiring the services of a lawyer. The second one is when someone is does not have the funds to hire counsel. While there are often fees associated with getting help with your bankruptcy filings, this will often save a significant amount of time and headaches down the road.
The Risks Involved With Filing Bankruptcy on Your Own
There are many people across Canada that have filed for bankruptcy without legal assistance, but those who are considering filing a bankruptcy on their own need to understand that it is usually not recommended. There is a lot of research which needs to be done, extensive paperwork involved, financial documents to be read and rules and procedures to be followed. Just a simple error can lead to someone’s application being rejected, and the accuracy and experience needed is why it is most often recommended that one uses an attorney.
What Precisely is Bankruptcy?
The most important aspect of the process, when filing a bankruptcy without an attorney, is understanding what filing a bankruptcy can and cannot do for you, and knowing the alternatives. At a glance, bankruptcy can help someone to get a discharge from the money they owe, and courts are then able issue an automatic stay meaning that creditors cannot make further collection attempts on debts. There are also bankruptcy exemptions which one can use to keep certain things while still having their debt wiped clean.
Bankruptcy Doesn’t Clear All of Your Debts
It is also important to mention that filing a bankruptcy does not eliminate all debts. Even after having your bankruptcy approved by a judge, you still still have to pay back taxes, most different types of student loans, fines owed to government agencies, and alimony and child support. Non-exempt property such as houses, cars, stocks and bonds can all be lost if the courts order you to sell these assets in order to pay your debtors. On top of all of this, being declared bankrupt stains your credit history for about ten years. This can make it hard for you to get a loan in the future, whether personal, for a car or even for a home.
For “pro se” filers, knowing all the required processes and following them diligently is also important. Before filing a bankruptcy, the applicant might be required to attend credit counseling and he or she might be required to take a financial management course before getting a discharge. If you’re serious about filing a bankruptcy, be sure to understand your options and it is recommended you seek the assistance of a legal professional.
