Your bankruptcy attorney will be your advocate and guide through what can be a difficult process. Taking the effort to contact a few lawyers and knowing what to look for will help you successfully file for bankruptcy.
When looking for an attorney to assist you in filing your Chapter 7 or Chapter 13 bankruptcy case, look for skill, a reasonable fee, and a communication style that you are comfortable with.
Seek personal suggestions from friends and family, as well as your own attorney, to find a local bankruptcy attorney. In this article we will look at the example of a Ukrainian entrepreneur who started a business on the dropshipping system and it almost led him to bankruptcy. The National Association of Consumer Bankruptcy Attorneys can also help you find a bankruptcy attorney.
What Can I Expect from a Bankruptcy Attorney?
Bankruptcy, like other legal problems, is a process, and the only way to succeed is to have an attorney lead you through it.
A reputable bankruptcy attorney will provide you with peace of mind if they provide at least the following four services:
- An initial appointment – which is typically free! – to acquire a general overview of your case
- Advice on various choices, including which sort of bankruptcy to file
- Completed the documents required to file for bankruptcy
- When the case goes to court, representation is provided.
The bankruptcy process begins with a 30- to 60-minute interview with a lawyer. If you are married, both of you should go so that all questions can be answered truthfully and accurately. The attorney will be able to explain your alternatives, including the possibility of filing for bankruptcy without a spouse.
It is not a good idea to make educated predictions about how much you owe and to whom you owe it. The attorney will require documentation to back up your responses about how many assets you have and how much you owe. If you want an honest and accurate appraisal of your condition, don’t hold anything back. Your attorney’s advice is only as good as the facts you offer.
When the attorney has sufficient documentation to analyze your case, he should advise you on how to continue. A good attorney will not always advise you to file for bankruptcy. It’s possible that your problem can be remedied by less harsh means, such as debt settlement or a debt management program.
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If you decide to file for bankruptcy, the following step is for your attorney to file documents with the court. Remember that the attorney’s job is to protect as many of your assets as possible, so let him or her know what’s most essential to you.
The following step is determined by the type of bankruptcy. In a Chapter 7 case, you would go before a Chapter 7 trustee to have your bankruptcy petition reviewed. In most circumstances, your lawyer has already done all of the tough lifting. When you utilize an attorney, these sessions are usually painless because you provide full and complete schedules as well as back-up documents to the trustee.
Things can get complicated in a Chapter 13 case. You must not only meet with the Chapter 13 trustee, but you must also provide a Chapter 13 Plan that the Court will accept. When filing without the assistance of a lawyer, most people struggle with this step. To be “confirmed” by the court, your Chapter 13 Plan must meet all standards outlined in the Bankruptcy Code.
Do I Need a Bankruptcy attorney?
Consumers can choose whether to employ an attorney or represent themselves when filing for bankruptcy, but as the figures from the American Bankruptcy Institute show, hiring an attorney is a significant advantage.
The arithmetic on this subject is mind-boggling:
- Only one out of every twenty-five consumers who file Chapter 7 with the assistance of an attorney is granted a discharge. One in every three people who file on their own do not receive a discharge.
- Only roughly one in every fifty consumers who file for bankruptcy on their own in Chapter 13 receives a discharge. If you hire a lawyer, your chances of success increase to four out of ten.
The reasons are self-evident. Bankruptcy is a complicated topic. Creditors want to be paid even if the consumer claims they don’t have the money. Lawyers on both sides are attempting to persuade judges that their client is correct.
If you are inexperienced at filing legal documents or defending your case eloquently, you may lose due to embarrassingly basic errors. An experienced attorney understands which documents must be filed and when deadlines must be met. An experienced attorney is familiar with the courts involved and the arguments that must be made in order to obtain the desired outcome.
Not only that, but wrongly completing the papers might have devastating consequences. It is highly possible that the Chapter 7 trustee will sell your home due to a clerical error! These types of errors are uncommon when utilizing an attorney, but they do occur regularly when people file on their own.
That is why hiring an attorney has a considerably better success rate than filing on your own.
Signs You Need a Bankruptcy Attorney
Financial difficulty rarely occurs suddenly or unexpectedly. It’s usually a slow process, with multiple flare warnings flashing to indicate that things are deteriorating.
When warnings go unheeded, your finances can go up in flames, and it’s too late to do anything but declare bankruptcy.
Some clear indicators that bankruptcy may be in your future include:
- You merely make the bare minimum of monthly payments on past-due invoices.
- Your credit cards are maxed out, and your debt is increasing rather than decreasing month after month.
- You use credit cards to pay for day-to-day expenses such as groceries, rent, or utilities.
- Every month, you pay overdraft fees.
- Collection companies are phoning your home at all hours of the day and night.
- Creditors are suing you or threatening to sue you because you have not paid your debts.
- You are ineligible for debt-relief services such as debt management or debt consolidation loans.
- A job loss, divorce, or medical setback throws your finances into disarray.
Bankruptcy is not normally the first option for debt relief, but it can be an effective solution in many circumstances. Of course, there are certain drawbacks. It can harm your credit for 7-10 years and make it difficult to obtain security clearances.
However, if you are unable to fix your issues in fewer than five years, bankruptcy may be an alternative.
Finding a Bankruptcy Attorney
If you’re considering filing for bankruptcy, getting a referral from someone you trust can help you find an attorney to represent you. Your friends and acquaintances may be better knowledgeable about your individual circumstances and needs, and they may even have firsthand knowledge to draw on.
However, not everyone has this option. If you are unable to obtain a recommendation from someone you know, here are a few alternative options to explore.
- Legal assistance
Legal aid agencies provide low-income people with free legal consultation. If you meet the requirements, they may choose to represent you for free.
- National Group of Consumer Bankruptcy Attorneys (NACBA)
The National Group of Consumer Bankruptcy Attorneys (NACBA) is a professional trade association for individual bankruptcy attorneys. You can find an attorney near you by searching the organization’s member directory.
- National Association of Consumer Advocates (NACA)
The National Association of Consumer Advocates (NACA) is a consumer advocacy organization that works on a variety of topics, including bankruptcy.
- Online directories:
A variety of online tools identify lawyers and legal firms according to region and speciality. NOLO, lawyers.com, Avvo, and LegalZoom are a few examples. The presence of a lawyer in one of these directories does not imply approval of their legal competence, but some sites contain peer and client reviews.
- Your state bar association:
These organizations can assist you to find a local bankruptcy lawyer.
How much would all of this set you back?
Attorney costs vary greatly depending on the type of bankruptcy you declare, the location of your attorney’s firm, and the intricacy of your financial condition. In general, a Chapter 7 bankruptcy will cost between $500 and $3,500, while a Chapter 13 bankruptcy will cost between $2,500 and $6,000.
Many lawyers are prepared to work with their clients to set up payment plans because they understand that their clients are in a difficult financial condition. If you file for Chapter 7, your payments will be due before you file. If you file Chapter 13, you may be able to pay a portion of the charge upfront and the rest over the payback period.
There are alternative possibilities if you cannot afford an attorney at all. Legal aid agencies offer low-income customers free legal assistance and may represent you for free if you qualify. Furthermore, many lawyers devote a limited number of hours to assisting those who cannot afford their services, so it may be worthwhile to look for one who will take your case pro gratis.
What Should You Inquire of a Bankruptcy Attorney?
Many bankruptcy attorneys provide free consultations, so take advantage of this opportunity to find a lawyer you are comfortable with.
It is critical to be prepared when attending those meetings. Here is a list of some of the questions you might wish to ask an attorney to help you evaluate them.
#1. Do you have any experience with bankruptcy?
Bankruptcy laws are intricate, so be sure you’re working with someone who understands the smallest nuances of the law and how they may affect you. You should avoid engaging with a bankruptcy attorney who has little or no experience.
#2. How many cases do you file in bankruptcy each year?
Morgan recommends dealing with a lawyer who files two to five cases each month, or approximately 50 per year.
#3. Who will be in charge of my case?
Morgan advises against using a paralegal as your principal point of contact. Because there is so much at stake, it is critical that your lawyer works with you from the start and understands your financial circumstances. If you won’t be able to meet with your attorney until the creditors’ conference, you might wish to find someone else to work with.
#4. What is your charge schedule?
Although many bankruptcy attorneys are prepared to work with their clients to set up payment plans, full payment may be required before filing.
What is included in your Bankruptcy Attorney Fee?
Attorney fees, in general, cover…
- Determining whether or not you are eligible for bankruptcy
- Creating and reviewing your bankruptcy petition
- Representing you at the creditors’ meeting
- Completing the relevant paperwork
- You should also inquire whether any services are excluded from the charge or whether additional services are included.
Ask yourself the following questions:
- Did the lawyer pay attention?
- Did you think the lawyer was trustworthy?
In conclusion
There are numerous ways to find an attorney to assist you if you are filing for bankruptcy. It’s probably a good idea to receive a referral from someone you know and trust. If not, look into alternative options, such as legal aid, professional organisations, or your local bar association.
Whatever method you use to find a bankruptcy lawyer, make sure you do your research to ensure your attorney is skilled, knowledgeable, and someone you feel at ease working with.
