On October 27, 2011, the Eastern District judges, clerk and clerk’s office supervisors met to discuss the ideas generated at the October 7 pro se brainstorming session. They decided to take the following actions: 1.) Installment fee applications: A.) The order granting the application to pay the filing fee in installments will require the debtor to make three payments of $102 each, due 30, 60 and 90 days after the petition date, respectively. If the debtor timely requests more time to pay an installment, only one extension will be granted; the judges no longer will consider multiple requests for extensions. If, before the expiration of the 120-day deadline prescribed by Rule 1006(b)(2), a debtor shows adequate cause, the court can extend the deadline for a full 180 days after the petition date. If the court dismisses a debtor’s case for failure to pay an installment, it will not vacate or reconsider that dismissal unless the debtor pays the full balance remaining on the filing fee along with the motion to reinstate. B.) If the court dismisses a debtor’s case for failure to pay any installment of the filing fee, the dismissal order will warn that debtor that if he files a new case within 180 days of the dismissal of the first case, the court will neither waive the filing fee nor grant a request to pay the fee in installments in the second case. If the debtor, in spite of that warning, files a second case within 180 days of the dismissal of the first case and asks either for a fee waiver or an installment plan, the court will deny those requests and give the debtor fourteen (14) days from the petition date to pay the filing fee in full. If the debtor does not pay the filing fee in full in 14 days, the court will dismiss the second case. 2.) Fee waiver applications: The judges and supervisors considered the suggestion that the court ask debtors to complete a questionnaire, collecting additional information to help the judges make fee waiver decisions. They concluded that all four of the judges already collect most of the suggested information themselves before making fee waiver decisions, and noted that there was no way to get debtors who filed by mail, or who had petition preparers file for them, to complete the questionnaire. Accordingly, the judges decided to continue making fee waiver decisions on a case-by-case basis, and to continue using the information they collect themselves from the petition, schedules and previous filings. The judges and supervisors also agreed that the judges would continue to rule on the fee waiver applications earlier in the case, rather than waiting until after the meeting of creditors. A debtor whose fee waiver application is denied after the meeting of creditors has lost some 45 to 60 days of the 120 days the rule gives him to pay the filing fee, whereas a denial early in the case gives the debtor more time to collect and pay the fee in installments. 3.) Petition preparers: Starting January 1, 2012, the court will impose a cap on the “presumptively reasonable” petition preparer fee. This cap will be $75. If a petition preparer believes her services are worth more than $75, she must file an affidavit explaining why, and the court will decide whether to allow a higher fee. If a petition preparer charges or collects more than $75 without court approval, the court will require the preparer to refund the money to the debtor, and the preparer could face other sanctions. The court already has started advertising this policy by posting it on the web site and placing flyers in the pro se packets, at the Help Desks, and at the front counter. The court will continue its previous efforts, as well–monitoring petition preparers who do not comply with the law, providing support to the Help Desks, etc. The judges and clerk’s office staff are grateful to all of the people who contributed ideas and suggestions, both on the list serve and at the October 7 brainstorming session. We look forward to continuing to work with the bar to address the needs of the bankruptcy community in the days ahead.
The Eastern District of Wisconsin has been among the top districts in the country with the highest ratio of pro se debtors (people who file bankruptcy without an attorney), to the point where it has become a problem for the judiciary. Pro se debtors are far less likely to appear at the section 341 Hearing, pay the filing fee, complete their counseling courses, file complete paperwork, complete paperwork properly, furnish documents to the trustee in a timely manner, etc. All of this accumulates and creates a strain on the judges and trustees who are administering these cases.
Last month, the bankruptcy court hosted a conference with debtor’s attorneys, creditors and creditor’s attorneys, trustees, and judges. The discussion centered on ways to reduce the number of pro se filings and make the pro se cases that are filed flow smoother. The result of that conference is that the judges are imposing new policies and procedures which will be less forgiving of debtors who fail to meet certain deadlines and requirements.
Even the simplest “cookie-cutter” bankruptcy cases care complex and difficult for someone without specialized training. While most of the bankruptcy schedules are fairly straightforward, there are two forms that are next to impossible to complete without an attorney who is not only familiar with the statutes and rules governing these forms, but also the extensive case law that has evolved around various issues of these two forms.
A lot of people avoid hiring attorneys either because they believe they can do it cheaper or because they just don’t like lawyers. But filing bankruptcy (especially if done incorrectly) can have massive consequences and repercussions. It is unwise to try to navigate the laws, forms, and procedures alone and without the assistance of someone who routinely handles bankruptcy cases.