Filing Ch. 7 on Your Own? Avoid These Mistakes

Dear Bankruptcy Adviser,

I filed for Chapter 7. I received a deficiency notice to file a Chapter 7 Individual Debtor's Statement of Intention, but I do not have any secured debt. Do I still have to file the statement?

--Sharon

Dear Sharon, The quick answer is yes. You must file a Statement of Intention along with the rest of the petition documents. That being said, you may have to fix just this one deficiency and you will likely be in compliance.

While you may believe it is not necessary because that document does not apply to your case, the bankruptcy system is not set up to determine which documents apply to which case. The system tries to be uniform and require each bankruptcy filer to file the same documents.

Based on your question, it is obvious you filed on your own. While you are allowed to file without an attorney, you are held to the same standards. That means you must comply with all the same requirements: File a completed petition and schedules, disclose all assets, provide documents to the trustee, etc.

Here are common mistakes I see from people filing without an attorney.

Missing Required Schedules

You can download the bankruptcy petition and schedules on most bankruptcy court websites. Most of the sites are relatively user-friendly. You may even be able to enter your information directly onto those documents before you print them out.

Once you file your petition, it is reviewed by the clerk of court. The clerk will issue a notice of deficiency if you don't file one or more required schedules. You have 15 days from the date that deficiency notice is filed to provide the missing schedule(s), or your case may be dismissed.

Not Sending in Required Trustee Documents

You are randomly assigned a bankruptcy trustee when you file your bankruptcy petition, along with a hearing date and time to meet with the trustee. The trustee reviews your petition, schedules and required documents. All trustees will want to see pay stubs for the 60 days prior to filing and the most recently filed tax returns. If you are self-employed, you will need to provide a business profit and loss, generally for the past six months, and two months' worth of bank statements.

The trustee needs to see these documents a minimum of seven days prior to your hearing. If you fail to send in the required documents, the trustee has the right to dismiss your case. In most cases, though, the trustee wouldn't dismiss the case immediately, but will continue your hearing to give you one more chance to comply. In many cases, the trustee will file a motion requiring you to explain to the judge at a separate hearing why you did not comply with the requirements.

Not Filing for the Second Credit Counseling Course

Prior to filing, you had to complete a credit counseling course and receive a certificate of counseling. After you file, you need to complete a second course, called Post-Petition Instruction Course Concerning Personal Financial Management.

If you do not complete and file the second course paperwork prior to the closing of your case, you will not receive a discharge. That is the whole point of filing, eliminating your debt. If the case is closed without receiving a discharge, you will have to file a motion to reopen your case for the purpose of proving you completed this second course certificate. That will cost you a filing fee to reopen the case.

I'm glad you were able to figure out the paperwork and file your petition. Hopefully, you will not see any other obstacles to keep you from receiving your discharge.

Bankrate's content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate's Terms of Use.