The New Bankruptcy Forms Are Longer and More Confusing
The scariest phrase in the English language is “I’m from the Government and I’m here to help!”
Well, the government decided in its infinite (and by infinite, I mean infinitesimal) wisdom to completely revise the forms needed to commence a bankruptcy case.
The stated goal was to make them easier and more understandable for non-attorneys to complete.
They are not.
And I promise I’m not just saying that because I’m a bankruptcy attorney.
Follow The Instructions Closely, And You May Regret It
On December 1, 2015 these new mandatory forms go into effect and the process for navigating a successful bankruptcy case will become far more perilous for those without legal representation.
The instructions–that’s just the instructions folks–are 41 pages long.
That should tell you something right there about how easy the forms are to accurately complete.
But here’s the best part: If you follow the instructions and accurately answer the questions as they request, you can still be making big mistakes.
Your mistakes will generate objections from your case trustee.
And while some can be fixed, you will definitely be increasing the hassle and risk factors in your case.
“But how can this be?” you might ask.
Well, for starters, bankruptcy forms are not law.
They are just forms–albeit required forms–that provide information to the court, trustees, and creditors.
Regardless of what the instructions say, without knowing what the laws are, you have no way of knowing whether the information you are listing, or omitting, is going to cause a problem.
And you have no way of knowing how to present the information in the best way for your situation.
And believe me, it can make a huge difference.
And there’s no way even 1,000 pages of instructions can impart that knowledge to you.
One issue became apparent when I reviewed the new exemption form.
This is just one of many issues there are with the forms, and I merely list this here to give you a taste of the pitfalls you will encounter without an attorney.
Not to get too detailed here, but the forms give you two options for listing the amount of an exemption and you must choose one.
One is the actual dollar amount, and the other is “100% of the Fair Market Value Up To The Exemption Limits”.
The second one sounds pretty good, right?
Well, it’s not.
Check the 100% box and you will likely draw an objection by the Trustee in your case and have your exemption disallowed.
(To see what an exemption is and how important they are to protecting your property, see my page on bankruptcy exemptions)
You may be able to fix this by amending (assuming you have calculated your exemption amounts properly and have some left to take) but the point is that by following the rules, you can easily make mistakes because the forms are not the law.
Harder For Trustees Means Harder For You
The new forms tend to hide certain information from the case trustees, whose job it is to administer non-exempt assets in a Chapter 7 case.
The harder it is for the trustees, the harder it will be for you because you will be required to come up with the information in a format the trustees can readily utilize.
Don’t have the information in the right format, and you could be in for some real headaches.
Provide the information in the right way from the beginning (regardless of what the forms say), and you have a much better chance of smooth sailing in your case and of obtaining your discharge.
Hiring A Bankruptcy Attorney Has Never Been More Important
It has never been a good idea to file bankruptcy without representation by an experienced attorney.
Even the US Courts admit this.
But with these new forms, the court system has now made the path far more perilous for those not represented by counsel.
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