One of the biggest mistakes of pro se bankruptcy debtors is that they often ignore bankruptcy exemptions to their detriment. It's not that they believe the exemptions are unnecessary, it's just that they don't understand the exemptions or they aren't aware that they have access to them.
Below are a few things you need to know about bankruptcy exemptions:
They Are Generous (Sometimes)
Texas offers some of the most generous bankruptcy exemptions in the entire country. But a bankruptcy debtor can't take advantage of them if they don't meet the residency requirements. Bankruptcy residency requirements basically say that you can't use a state's exemptions unless you've resided there for at least two years. The debtor may have the option to use federal bankruptcy exemptions; but they really need to speak with an experienced bankruptcy attorney to find out if federal exemptions will benefit them.
The Bankruptcy Trustee Is Not An Information Center
Despite the debtor's right to bankruptcy exemptions, the trustee in the case is not legally obligated to educate debtors about those rights. This means that if a bankruptcy debtor overlooks an exemption, the bankruptcy trustee won't rush to make a debtor aware of that fact. Remember, the bankruptcy trustee is there to make sure that the creditors are paid as much as possible.
Pro Se Debtors Are Vulnerable
If a debtor is filing bankruptcy without an attorney, they are more vulnerable to creditor challenges and mistakes when trying to claim exemptions. Failure to successfully defend bankruptcy exemptions can cause the debtor to lose valuable assets and cash.