Filing Chapter 13 Without a Lawyer is Almost Automatic Failure

It feels self-serving sometimes to hear attorneys warn the public against representing themselves in bankruptcy. As the years go on, however, I have come to agree more and more with the analogy that one would not perform surgery on themselves. You want someone with the right tools, experience and knowledge to perform surgery, right? These statistics make me think we should yell “Don’t represent yourself!” from the rooftops:

Chapter-13-Success-Chart-ABI

The American Bankruptcy Institute published an article in August 2017 that looked at a sample of 123,000 Chapter 13 cases that were closed between 2010-2016. The article looked at many things, including the completion rates. This included the success rates of single versus joint filers, whether the parties had filed bankruptcy before and other metrics.

There were two startling metrics for me. First, the overall success rate for Chapter 13 was 38.8%. That is low. We are gathering data from our firm, but believe our successful rate of completion is more than 85%, including the few cases that were converted to Chapter 7 voluntarily for a discharge because of a change of circumstance.

The second metric is the terrible completion rate of pro se filers, i.e., people that file without an attorney: 2.3%. That’s right, you have a 1:50 chance of making it through a Chapter 13 on your own. I still remember one of my first Chapter 13 meeting of creditors where the trustee talks to the everyone before the hearings are conducted. He told room “For those of your without attorneys, I am not your friend, and please get an attorney.” Now that I think about it, I don’t recall seeing a self-represented person at Chapter 13 confirmation hearings ever get a case confirmed. It’s happened, obviously, but it’s a bit of a unicorn.

There is a statistical anomaly that must be noted. There are 1,106 cases of those 123,000 Chapter 13 cases where it is unknown if the person had an attorney. That unknown group enjoyed an 88% success rate. It is strange that the attorney status is not known, and if the successful cases were all piled into the pro se category, the pro se category would have a much higher success rate, though still far below the rate of success enjoyed by those that hired an attorney.

Based on the hearings I’ve attended in that same 2010-2016 period, I am going to guess close to zero, or maybe 2.3% of those cases filed by people on their own made it to the end. Chapter 13 is surprising complex.