Effective December 1, 2015, the Bankruptcy Courts of the United States required the use of recently revised petition and schedule forms. The petition and accompanying schedules have been lengthened considerably. The additional length is a product of the simpler language used to describe the assets, liabilities and transactions commonly disclosed in a bankruptcy filing. However, it is also a product of the additional information now required that was not part of the previous forms. While the information required to be submitted with the forms is more easily understood, there are still considerable perils for the pro se debtor.
Despite the easier to understand language, there are still abundant opportunities for a pro se debtor to overlook an asset. Many debtors do not understand that their right to receive something in the future – such as an inheritance, lawsuit or income tax refund – is considered an asset just as if the debtor already owned the property. Failure to disclose an asset can result in the seizure of the asset by the bankruptcy trustee, or the loss of the right to receive the asset. Likewise, many debtors fail to list assets that they own which may be in the possession of another person. Identifying and disclosing assets is one of the fundamental parts of the attorney consultation process, and the new forms do not change the importance of this responsibility. Describing the transfers of assets that are no longer in the debtor’s possession is another part of the bankruptcy process that is overlooked by pro se debtors, but included by bankruptcy attorneys.
While the language in the forms is simpler, it does not change the requirement to properly exempt the property. Georgia law allows for specific property of a defined value to be “exempted” or safeguarded from forfeiture to a bankruptcy trustee. So even if an asset is properly disclosed, the pro se debtor could still lose the asset because they didn’t exempt it, or used the wrong exemption. Claiming exemptions is probably the most tedious part of the bankruptcy process, and can be further complicated if the debtor has moved from another state, or has had multiple residences in the years prior to filing.
Finally, the simpler forms don’t assist the pro se debtor with the necessary motions to avoid liens on their personal property, stop garnishments/lawsuits, and reaffirm on their secured debts. For instance, the filing of a bankruptcy case by a debtor who has a judgment against them will not eliminate the judgment lien on their residence. That requires the filing of a separate motion independent of the bankruptcy filing. And most pro se debtors are ill-equipped to negotiate with their creditors over the retention of their property. Most bankruptcy attorneys deal with these same creditors on a routine basis, and can counsel the debtor as to their course of action with respect to secured debts, such as surrender, redemption or reaffirmation.
So while the new forms are easier to understand and complete than the previous forms, they do not eliminate the common problems associated with pro se debtor cases: incomplete/inaccurate disclosure of assets and transfers; failure to exempt assets; and negotiating with experienced creditors who have no obligation to counsel the debtor regarding their legal rights.
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