Challenges Faced by Pro Se Debtors

“Pro Se” Debtors are consumer debtors that file bankruptcy themselves, without the assistance or advice of an experienced bankruptcy attorney. Most Bankruptcy Courts and Trustee’s encourage debtors to seek the advice of a qualified attorney when filing bankruptcy.

Filing bankruptcy with an attorney is strongly recommended by the United States Courts because bankruptcy has long-term financial and legal outcomes. The United States Courts require strict compliance with the United States Bankruptcy Code and the Federal Rules of Bankruptcy Procedure. The forms are voluminous and complex. Debtors are required to fully disclose all assets and all debts. Further, Debtors are required to sign the Petition, Schedules, and Statement of Financial Affairs and verify that all information disclosed therein is true and correct under penalty of perjury.

Many pro se bankruptcy cases have been dismissed because the debtors did not file the correct forms, incomplete forms, or otherwise failed to fulfill their obligations in the bankruptcy code. Often, pro se debtors are dismissed within the first month after filing their petition. For example, within the six (6) month period beginning August 1997 through January 2018, 87 pro se bankruptcy cases were filed in the Northern District of Texas; 83 of those cases were dismissed (95.4%). During the same period, 68 pro se bankruptcy cases were filed in the Eastern District of Texas; 63 of those cases were dismissed (92.6%).

Upon dismissal, the Bankruptcy Court may impose further limitations against the Debtor or Debtor’s property. If you have filed multiple cases that have been dismissed within the prior three (3) years, the Bankruptcy Court may enter an Order dismissing the case with prejudice for a period of 180 days to one (1) year. In the Eastern District of Texas, if you fail to confirm your Chapter 13 Plan, the Bankruptcy Court may enter an Order dismissing the case with prejudice for a period of 120 days. This means that you may be barred from refiling a bankruptcy case for the referenced period of time. While debtor is barred from refiling, there is no stay in place to protect debtor’s property. Consequently, debtor may lose their home, vehicle, or other property.

In a recent opinion, the Honorable Brenda T. Rhoades, United States Bankruptcy Judge for the Eastern District of Texas, granted in rem relief against a debtor’s home following dismissal of Debtor’s latest Chapter 13 case. See In re Roger C. Thurmond, Case No. 18-40051 (Bankr.E.D.Tx 2018). In an attempt to stay foreclosure of his home, Debtor filed eight (8) prior Chapter 13 Cases pro se over prior eight years commencing October 2010 through November 2017.

In the interim, between Chapter 13 cases, filed several affirmative lawsuits and attempted to obtain a temporary restraining order to stop foreclosure, the TRO request was denied, and the Property was sold to US Bank National Association (“US Bank”) in December 2016. US Bank subsequently obtained a judgment for possession. Each time US Bank attempted to execute its writ of possession, Debtor filed a subsequent Chapter 13 Petition to stay execution of the writ and eviction.

The debtor filed his most recent pro se Chapter 13 Petition on January 8, 2018 (the “Petition Date”). The Chapter 13 Trustee immediately filed a Motion to Dismiss with Prejudice for serial filing. After hearing, the Court dismissed the case with prejudice to refiling for a period of 180 days.

The Bankruptcy Court was familiar with the Debtor’s prior repetitive bankruptcy filing and granted expedited hearing on US Bank’s Motion for Relief from Automatic Stay. Specifically, the Bankruptcy Court found the Debtor and Co-Debtor have filed eight (8) prior bankruptcy cases, pro se, for the sole purpose of using the automatic stay and the co-debtor stay to frustrate U.S. Bank’s attempts to foreclose on and regain possession of the Property; this evidenced a scheme to attempt to delay, hinder, or defraud U.S. Bank. 11 U.S.C. § 362(d)(4); see In re Muhamin, 343 B.R. 159, 166 (Bankr. D. Md. 2006); see also, In re Young, 2007 WL 128280 (Bankr. S.D. Tex. Jan. 10, 2007). All of their prior cases failed, quickly, as a result of their failure to comply with the requirements of the Bankruptcy Code and Rules. In re Roger C. Thurmond, Case No. 18-40051 (Bankr.E.D.Tx 2018). Had debtor retained experienced bankruptcy counsel early on in his initial bankruptcy case, he likely would have been more successful in protecting his Property.

Finally, the Bankruptcy Court Ordered that termination of stay shall constitute in rem relief under 11 U.S.C. § 362(d)(4) which essentially means that the subject Property will not be protected by the automatic stay in a subsequent bankruptcy. In this case, the Bankruptcy Court Ordered that the automatic stay shall not apply to any case under Title 11 of the United States Code purporting to affect the Property for a period of not less than two (2) after the date of entry of the Court’s Order. Id.

As you can see, many pro se bankruptcy cases are quickly dismissed for failure to comply with the requirements of the Bankruptcy Code and Rules; multiple cases may be dismissed with prejudice to refiling for a set period of time.

Nicholas C. Inman and Linda J. Littlefield combined have forty-eight (48) years experience practicing bankruptcy law. We have the knowledge and experience to advise you on all requirements in your bankruptcy case; ensure compliance with the Bankruptcy Code and Federal Rules of Bankruptcy Procedure; guide you to successful completion of your bankruptcy case.

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