Study Shows Chapter 7 Debtors Represented by an Attorney Are “Almost Ten Times More Likely to Receive a Discharge” of their Debts

My own professional experience about the dangers of filing bankruptcy without an attorney is validated by carefully analyzed data.

In my work as a bankruptcy attorney, I spend a fair amount of my time attending Chapter 7 “341 hearings” with my clients. That’s the usually straightforward 10-minute or so meeting with the bankruptcy trustee that everyone filing bankruptcy gets to go through a month or so after their case is filed. As I wait for my clients’ turn and listen to other hearings, I see the bad things that happen there to people who file bankruptcy without an attorney. I won’t go through a litany of horror stories here, but let me just say I’ve seen countless examples proving how dangerous it is to file a Chapter 7 bankruptcy without an attorney. Besides, I know how complicated bankruptcy laws and procedures are because that’s what I deal with day in and day out. Yet, I’ve always wondered: in actual fact, beyond my own professional knowledge and experience, how much more dangerous is it going without an attorney?

This question is addressed, among many others about the current state of bankruptcy, by a book that was published just a few weeks ago, Broke: How Debt Bankrupts the Middle Class. A compilation of articles by respected scholars, one of the chapters focuses on “pro se” filers (those without attorneys). The author of this chapter, Asst. Professor Angela K. Littwin of the University of Texas School of Law, analyzed data from the Consumer Bankruptcy Project, “the leading [ongoing] national study of consumer bankruptcy for nearly 30 years.” She concluded “that pro se filers were significantly more likely to have their cases dismissed than their represented counterparts.”

I haven’t yet gotten my hands on that book for the statistical details there, but in another closely related study from last year, Prof. Littwin concluded that “17.6 percent of unrepresented debtors had their cases dismissed or converted” to Chapter 13, [while] only 1.9 percent of debtors with lawyers met this fate.”  Even after controlling for other factors such as “education, race and ethnicity, income, age, homeownership, prior bankruptcy, whether the debtor had any nonminimal unencumbered assets at the time of the filing,” “represented debtors were almost ten times more likely to receive a discharge than their pro se counterparts.”

In her carefully understated and scholarly appropriate way, Prof. Littwin concluded that “there may always be additional unobservable factors for which I cannot control… [b]ut this analysis suggests that filing pro se dramatically escalates the chance that a Chapter 7 bankruptcy will not provide a person with debt relief.”

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