The Pro Se Problem

A report from the Administrative Office of the U.S. Courts highlights a disturbing trend: since the adoption of the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005, pro se filings have grown dramatically. You can read the report here. In the past five years, filings by attorneys have increased by 98%, while pro se filings increased by 187% over the same period. During the twelve months ending June 30, 2011, there were 130,086 pro se cases filed accounting for 9% of the total filings in bankruptcy. During 2011, pro se filings accounted for 8% of chapter 7 cases and 10% of chapter 13 filings.

Pro se filings were most common in the Western United States, Florida and Georgia. In the Central District of California, pro se cases made up a staggering 27.1% of the total filings. Pro se filings were more modest in Texas. The Northern, Eastern and Western Districts of Texas had pro se filing levels in the range of 2.1% to 4.0% while the Southern District fell in the range of 4.1% to 8.0%.

The surge in pro se filings has two important consequences for the court system. One is that pro se filings are much less likely to succeed than filings by represented debtors. According to data presented by Professors Katie Porter and Jay Westbrook at the National Conference of Bankruptcy Judges, nearly 90% of pro se chapter 13 debtors had their cases dismissed prior to confirmation of a plan and only 4% still had a case pending after four years. Among pro se chapter 7 debtors, a 2001 sample showed that 100% received a discharge. A 2007 sample showed that 17.6% of pro se chapter 7 debtors had their cases dismissed for technical problems as compared to just 1.9% of represented debtors.

When people file for bankruptcy but are unable to obtain relief from the court system, they are likely to become angry, frustrated and cynical. It would not be surprising to see unhappy pro se debtors manning the barricades of the Occupy movement or acting out their frustrations in court.

Another problem identified by the Administrative Office is that pro se filings are frequently accompanied by filing fee waivers. According to the report:
Filing fees supply a significant amount of revenue to the courts, so a decline in bankruptcy fees collected will affect the resources available to the Judiciary at a time when they are needed to address an increase in workload.

While the Administrative Office report did not specifically identify the cause of the rise in pro se filings (other than noting a rise in districts where the foreclosure crisis is acute), one answer seems to be that BAPCPA has created a class of debtors who are too broke to file bankruptcy. By increasing the complexity of bankruptcy, Congress both increased the cost to file and made it more difficult to file pro se. This is a cause for concern.