With the effects of Coronavirus still impacting the economy, many people are facing loss of income. This reduction in income makes it harder for working people to pay their bills. Things might not get better. One economist estimates 42 percent of recent layoffs will result in permanent job loss.
Whether their lay offs are permanent or temporary, people are looking for ways to save money on goods and services that they need. With the advent of the Internet, people have become used to finding information and deals on items they need. The Internet Age has made people used to getting things fast and cheap, or even free. It has also made people believe in do-it-yourself. Just watch a video and you can do anything yourself. The recent lockdowns have had people searching for Youtube videos on how to cut their own hair, since most salons and barber shops have been closed.
Some people who are facing overwhelming debt also look for do-it-yourself solutions to deal with their debt. They often file for bankruptcy without an attorney. There are signs in Jacksonville along I-95 exits saying “Bankruptcy $150.” These signs are placed along the interstate by non-lawyers or “petition preparers” who will take $150 from you to type the documents necessary to file a bankruptcy case. The thought is that bankruptcy is just filing out some forms and filing them with a court. (This author once had a boss, who is a lawyer. This lawyer declared, “Bankruptcy isn’t rocket science; it is just filling out a bunch of forms about your finances.” When this person filed for bankruptcy a few years later, she hired a competent lawyer.)
Our office receives calls from people whose cases have issues in bankruptcy court because they used paralegal typing services to prepare and file their cases. Non-lawyers are not allowed to give advice to consumers about their legal rights and issues. In bankruptcy, most of the analysis of a case is done before the case is filed. Some issues which must be analyzed are:
- Under which chapter of the bankruptcy code you should file
- Whether you qualify for a Chapter 7 case
- Whether you can you keep your house, car and other property if you file bankruptcy
- Which of your debts will be discharged once your case is completed
- Whether the trustee will sue your relatives and business partners to recover transfers to them
- Whether you can lose your job or security clearance if you file bankruptcy
- The effect that bankruptcy could have on money that you inherit
- Whether bankruptcy stops collection of all debts
- Whether bankruptcy can help you reinstate your suspended driver’s license
We get calls at our office from people who used a petition preparer to type their case. The paperwork looks the same as if a lawyer did it. They got a case number so everything looks fine. They are happy because they saved $1,000 or more by not hiring a lawyer. However, when the debtor has her meeting of creditors, the trustee wants to take her car (or make her buy it again) or wants to sue her mother since she used her tax refund to repay mom the money she lent her while she was struggling. All of a sudden, saving that $1,000 by not hiring a lawyer doesn’t look like a smart move.
So these clients end up hiring lawyers to “fix” their cases that a petition preparer messed up. The petition preparer claims that she did nothing wrong–that all she did was type the documents filed with the court. But in reality, she did many things wrong. The Florida Bar calls it the “unauthorized practice of law.” The author has talked to 100s of debtors over the past 25 years in this situation. The paralegal told them which Chapter to file, which property to list, which property the court would allow them to keep, and which debts would be “wiped out” by filing bankruptcy. These are all legal issues, about which a non-lawyer may not give advice.
About 10 years ago, this author was in court with about 20 debtors who had their meetings of creditors that day. (This meeting is required of every debtor who files bankruptcy; it allows the case trustee to question the debtor about her paperwork and case in general.) A young lady came to the table without a lawyer. She said she paid a petition preparer $150 to type her case; she bragged about how she had saved over $1,000 by not hiring a lawyer. The trustee immediately noticed her two-carat diamond ring. He asked her what she thought it was worth. She said that her boyfriend paid $12,000.00 for the ring. The trustee told the debtor that he wanted the ring and was going to file a motion for turnover if she did not voluntarily give him the ring. She protested and pointed out that, “my paralegal told me that my wedding ring is exempt.” The lawyers in the room chuckled in unison. There is no wedding ring exemption in Florida, a state that has very limited personal property exemptions. A petition preparer gave her bad advice when a petition preparer should not be giving any advice. The two biggest issues in a bankruptcy case are: (1) which property may a debtor exempt, or keep and (2) which types of debts will be discharged. These are legal issues which only a lawyer may advise you about.
Another debtor hired a petition preparer to file his Chapter 7 case. He was an auto mechanic. He owed $20,000 worth of tools, which the petition preparer told him were exempt (meaning the trustee could not take them and sell them to pay his creditors. However, Florida has no “tools of the trade” exemption, so he had to convert to Chapter 13 and payback about $20,000 of credit card debt.
Filing for bankruptcy is a serious decision. Not using a lawyer can cause you to lose your home, your car, your wages, or have your relatives sued by a trustee in federal court. While there are somethings that you can do on your own by using Google or Youtube, filing for bankruptcy is not one of those things. If you cut your own hair and mess up your bangs, they’ll grow back in a month or two. If you file your own bankruptcy, you could end up without a car, tools, or a job.
Also, with COVID-19 causing widespread job loss and people searching online for “bankruptcy attorneys near me,” be aware that many lawyers are trying to start doing bankruptcy in order to cash in on the anticipated tsunamiof bankruptcy cases to be filed this year. These lawyers might have little to no experience in the area, and that could land you in trouble as well. An inexperienced bankruptcy attorney is often just as bad as a $150 petition preparer.
If you have experienced a layoff, reduced wages or loss of income, contact the Law Office of David M. Goldman, PLLC today for a free initial bankruptcy consultation. Our office has a bankruptcy lawyer who has been helping debtors discharge their debts and protect their assets for nearly 28 years. A Jacksonville Bankruptcy Lawyer can help you decide if filing bankruptcy is best for your future.