All bankruptcy cases are heard in federal court.
Bankruptcy is a legal process that provides a fresh financial start to honest but unfortunate debtors who are unable to pay their debt obligations. The U.S. Constitution places the right and responsibility for creating bankruptcy laws on Congress; thus, all bankruptcy cases are heard in federal court. Chapter 7 bankruptcy, sometimes referred to as liquidation bankruptcy, involves the liquidation of the debtor's assets to pay his creditor's claims. Having an attorney represent the petitioner is advisable but not required for individuals, according to the United States Courts government website.
Debtor Type
Individuals, corporations and partnerships may file for protection under Chapter 7 of the Bankruptcy Code. Corporations and partnerships that file for Chapter 7 bankruptcy are required to engage the services of an attorney to file their petition, according to the United States Courts website. There is no requirement for individuals to use an attorney to file a Chapter 7 bankruptcy petition. Individuals who act as their own attorney are referred to as Pro Se litigants.
Considerations
United States Courts advises individuals who wish to act as their own bankruptcy attorney to be familiar with the Federal Rules for Bankruptcy Procedure and the U.S. Bankruptcy Code. Bankruptcy rules are specific to the District Court that has jurisdiction where the bankruptcy case is filed. These rules can be quite technical. Individuals acting as a Pro Se litigant are expected to comply with all the same requirements as a qualified professional attorney, including filing all the proper forms according to the time frames established by the local bankruptcy court rules and appearing at all appropriate court hearings.
Petition Preparers
There are several bankruptcy forms that must be accurately filled out by the petitioner, including the B-1 Voluntary Petition form with all exhibits, the B-3 Application form and the B-4 List of Creditors Holding 20 Largest Unsecured Claims form. Individuals who file for Chapter 7 bankruptcy may utilize the services of petition preparers to help complete the information required on these bankruptcy forms. Petition preparers are not considered legal counsel and may not provide legal advice to the petitioner.
Consequences
The U.S. Bankruptcy Court, District of Colorado notes that 81 percent of the bankruptcy cases that were dismissed by the court under current bankruptcy rules involved petitioners who acted as their own attorney. Bankruptcy involves both legal and financial consequences that may affect the petitioner and creditors for years. Individuals who are considering filing Chapter 7 bankruptcy are strongly advised to engage the services of a competent attorney.
