Chapter 13 bankruptcy cases filed by pro se’s create significant issues for debtors and burden on the bankruptcy administration system.
Many people in financial distress try to file bankruptcy without the assistance of experienced bankruptcy attorneys. Most will find roadblocks for the process to proceed to the desired goal “discharge”. The roadblocks include filing the wrong type of bankruptcy (such as filing a chapter 7 when they should file a chapter 13), missing deadlines, filing multiple cases which inhibit their ability to have an automatic stay choosing the wrong exemptions or comply with filling out the means test forms.
Individuals try to use a chapter 13 for various reasons, such as trying to stop a foreclosure, stripping unsecured junior deeds of trust/mortgages, pay past due taxes, discharge property settlement agreements, etc. The requirements to successfully complete a chapter 13 are very complicated. It takes several years for an experienced chapter 7 bankruptcy attorneys to learn to successfully maneuver the chapter 13 process. The success rate for an inexperienced pro se is reported to be zero. “… the Consumer Bankruptcy Fee Study revealed that zero chapter 13 cases filed pro se (without an experienced chapter 13 attorney) ended with the debtor receiving a discharge.” (See fn.1 at p. 50, citing Lois R. Lupica, “The Consumer Bankruptcy Fee Study: Final Report,” 20 Am. Bankr. Inst. L. Rev.17 Spring 2012).
Not only is the debtor impacted by their failure to receive a chapter 13 discharge of their debts, but the system administering bankruptcy cases is also impacted. The system includes bankruptcy judges, court and clerk staff, trustees, creditors and other bankruptcy attorneys. The pro se filings result in hundreds of deficient documents that must be dealt with by each person in the system. It is almost impossible to calculate the true cost a pro se debtor visits on the bankruptcy system. (contributions by By Michael B. Joseph, ABI May 2016 Journal)
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