The American Bankruptcy Institute ‘ABI’ released a report addressing the astronomically high failure rate of chapter 13 bankruptcy.  The findings are not surprising for those of us who work in this world, but are shocking for the rest of the consumer community.

It is likely that many bankruptcy judges have never had a successful chapter 13 pro se case.

According to the Report addressing pro se cases (filed without an attorney) Each year 25,000-40,000 debtors decide to file a chapter 13 case without an attorney.  In California, one-third of chapter 13 cases have been filed pro se, accounting for nearly 40 percent of all such cases nationwide.

Only about one in 45 pro se chapter 13 cases result in a completed bankruptcy plan.

chapter 13Regardless of where the cases are filed, the data paints a fairly dismal picture of the consequences of a pro se filing.  More than half are dismissed within three months of filing, and more than 80 percent are gone with-in six months.

chapter 13

Chapter 13 bankruptcy extremely high failure rate.

Less than one in 200 pro se debtors who satisfy all three of these criteria below end up with a successfully completed repayment plan.

The pro se success rates are even worse for debtors with:

  • only one source of income (only one working debtor),
  • debtors with a prior filing and
  • debtors who do not pay their filing fees.

THE MORAL – Would not do your own open heart surgery? If not then why would you do something as complicated as a chapter 13 without an experienced bankruptcy attorney in your corner?