– Hey everybody, John Skiba here from the Arizona Consumer Law
Group, I’m also founder of the Consumer Warrior Project. And on today’s video, I want
to address the question of do you really need a lawyer
to file for bankruptcy? And for good or for
bad, bankruptcy has this reputation of really just
being, you know you fill out a few forms, you file with the
court, and you know presto, your debts all go away, and
usually it is not that simple, but the reality is
sometimes it is that simple. And sometimes an attorney
is not necessary, which I know is probably
not a popular opinion amongst other bankruptcy
lawyers like myself, but the truth is there are certain cases where an attorney is really not necessary to file the bankruptcy. The trick is, however,
being able to determine if you have a case that
falls into that category. And the ironic thing is
that’s really where the legal expertise comes
in, is an attorney could look at a case and say,
“Yeah this is going to be “a pretty straightforward
case. Probably not something “that an attorney’s going to
be totally necessary for.” I mean, always the best
way to go through the bankruptcy process is with
counsel, but for a lot of people they just simply can’t afford it. And I meet with people
day in and day out here in my law practice in Arizona,
they need bankruptcy assistance, but they just simply
don’t have the funds to be able to go through that process, because it is a fairly lengthy process, even a Chapter 7 which
is what most people file, here in Arizona you’re
looking at at least a four to five month process,
so you have an attorney working for you during that time period, and there are costs associated with that. However, there are certain
cases where it’s not necessary. Let me tell you the areas
where you need to be careful of if you’re just looking to
file your own bankruptcy, and some of the areas where
an attorney can be helpful. The first is determining
if you qualify to file for a Chapter 7, like I said Chapter 7 is the most common type of
bankruptcy that people file. It’s the debt that
eliminates credit card debts, medical bills, those types of things, and it generally eliminates
those completely. However, back in 2005, they
changed the bankruptcy code and now you have to qualify if
you want to file a Chapter 7. You have to pass what’s
known as the means test. What this is, is they look
at your household size and your income, and they compare
that to the average income of the same household size
in your particular state. So in Arizona, for a family
of two, as long as you make at or below what the typical
family of two in Arizona makes, then you’re going to
qualify for Chapter 7. If you don’t, if you make more than that, then you may have to file
a Chapter 13 bankruptcy, which is a five-year process. So you can see that it’s a
pretty big deal to be able to determine whether it’s a
Chapter 7 or a Chapter 13, where an attorney can help
you is helping you to qualify if you have more than is
allowed under the means test. If your income is too
high, that’s compared to what’s allowed under the means test. There are many different
deductions an attorney can help you with to get
below that median income and make it so you can
qualify for a Chapter 7. So it’s one of these things
where that’s where an attorney can be very helpful, it’s
also one of those things where if you are well
below the average income for your household size, you’re not really going to have to complete the means test. There’s some documents
that have to be filled out, but it’s not something
where you’re going through and making deductions where an
attorney would be necessary. The second area where an
attorney could be very helpful in Chapter 7 bankruptcy in
particular is determining if your assets are protected
as you go through this process. Now when you file a Chapter
7 bankruptcy, all of your non-exempt assets become
property of what’s known as the bankruptcy estate, and what this is is the court can seize
these non-exempt assets, sell them, and give the
money to your creditors. Now, most things are
exempt in Arizona when you go through that process:
there’s exemptions like homes, like the homestead
exemption, most people are familiar with that, exemptions for cars, for household goods, wedding rings, retirement accounts,
those types of things. An attorney can be very helpful
to make sure that you apply the correct exemption to
that particular asset. I can’t tell you how many
times I’ve sat through bankruptcy hearings where
I hear someone who’s representing themselves
who’s at risk of losing a very significant asset simply because they didn’t apply the right exemption. It also can get kind of
tricky if you haven’t lived in Arizona for two years. If you haven’t lived here for
two years, we’ve got to use the exemptions from the
state where you came from. So that can be one of the areas
that’s a little bit tricky, is making sure that the
assets that you do disclose, that they’re not seized
by the court and sold. And it really just kind of
rolls over into the third area, which is exemptions, and
making sure that you apply the correct exemptions, those
can be a little bit tricky. But if your case is kind
of just one of those straightforward cases where
there’s really not a lot of assets, again you qualify
very easily because your income is below the median
income, those are the types of situations where they can
be straightforward enough with a little bit of guidance,
you can get the bankruptcy case filed and help avoid
some of those overall costs associated with the bankruptcy filing. Now something we do here at
the Arizona Consumer Law Group is we do offer limited scope
services where it comes to bankruptcy where we
actually help you prepare the bankruptcy documents,
I prepare them myself, I go through them with you, I
make sure you understand them and make sure the exemptions
are applied correctly, and then you are filing the
case, though, on your own, you’re actually going to go
through the case yourself, with some coaching from my office. So that’s something you
can do that can help reduce some of the costs; it’s not
appropriate in a lot of cases but in some cases, it just simply is. And it’s a way to cut some
of the costs associated with a bankruptcy filing
and get the debt relief that you’re looking for. If you want to learn
about that, as far as our limited scope services with
the bankruptcy process, or if you want to learn more
about what we do as far as debt collection lawsuits,
student loan litigation, or even legal coaching or
consulting on debt issues: go over to consumerwarrior.com that’s our website, you’ll be
able to see all the services we provide there, there’s
also over 500 articles that I’ve personally written,
and about another hundred of these types of videos that
can give you the information you need to deal with your debt problem. Thanks for watching today.