Your bankruptcy attorney will be your advocate and guide through what can be a difficult process. Taking the time to contact a few lawyers and knowing what to look for can 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 expertise, a reasonable fee, and a communication style that you are comfortable with.
Seek personal referrals from friends and family, as well as your own attorney, to find a local bankruptcy attorney. You can also find bankruptcy attorneys through the National Association of Consumer Bankruptcy Attorneys. Individuals that want to file for bankruptcy have the option of doing so without the assistance of an attorney.
In addition, if your case is simple, representing yourself may save you money on legal fees. It is not, however, always a good idea. If your Chapter 7 case involves valuable assets, or if you want to file for Chapter 13 bankruptcy, going it alone may cost you more than you save.
What Is the Role of a Bankruptcy Attorney?
Because the term “bankruptcy” conjures up such negative connotations in the minds of consumers, they frequently overlook the true reason for filing: A) It shields you from creditors; and B) it relieves you of some, or possibly all, of your debt obligations.
And that is exactly what a bankruptcy lawyer should do: protect your assets from debt collectors and find a way to release you from financial obligations.
While it is legal to file for bankruptcy “pro se” – on your own – statistics show that hiring an attorney, regardless of whether you file for Chapter 7 or Chapter 13, will result in a much happier outcome.
Lawyers represented consumers in 91.5 percent of the 486,347 Chapter 7 cases filed in 2017, according to Ed Flynn of the American Bankruptcy Institute. Lawyers were successful in having their clients’ debt discharged – that is, eliminated – in 96.2 percent of the cases. In other words, 428,097 people walked away from court debt-free.
People who represented themselves in Chapter 7 bankruptcy cases, on the other hand, were only successful 66.7 percent of the time.
The statistics are even more startling for consumers who file for Chapter 13 bankruptcy. Consumers who represented themselves were successful only 2.3 percent of the time. When an attorney represented a client in a Chapter 13 case, the success rate increased to 41.5 percent (debts were discharged after completing a repayment plan).
So, if your financial situation has deteriorated and you want to be protected from creditors and relieved of debt obligations, a bankruptcy lawyer could be your ticket to a new beginning.
What Can I Expect From My Bankruptcy lawyer?
What exactly does a bankruptcy lawyer do? The following are some of the most common types of services you can expect from your bankruptcy attorney if you hire a Chapter 7 or Chapter 13, bankruptcy attorney.
#1. Expect Your Bankruptcy Attorney to be Competent
Not all bankruptcy cases are complicated, but they are also not all simple. In either case, your bankruptcy lawyer should have the necessary skills to handle your case.
In general, the difficulty of your bankruptcy will be determined by the following factors:
- the particulars of your case
- Whether you file for Chapter 7 or Chapter 13 bankruptcy
- Whether the trustee in bankruptcy will sell any of your property (an asset or “no asset” bankruptcy case)
- If you have a small business and
- Involvement in bankruptcy proceedings
One way to determine if it’s a good fit is to inquire whether the lawyer has previously represented clients in similar situations.
#2. Your Bankruptcy Attorney should provide you with sound legal advice.
In general, the services provided by your bankruptcy attorney will be outlined in your retainer agreement (the contract you and your attorney sign). It is also your attorney’s responsibility to provide you with competent advice throughout the bankruptcy process.
First and foremost, you can expect your attorney to advise you on whether filing for bankruptcy is in your best interests. If that’s the case, you should also learn:
- Whether Chapter 7, Chapter 13, or another type will assist you in reaching your financial objectives
- What to expect during the bankruptcy procedure, and
- whether your case entails any special difficulties or risks
- Most importantly, if you have any questions, you can count on your attorney to promptly respond to your calls or emails.
#3. You can Expect your Bankruptcy Lawyer to prepare and file your paperwork.
Filing for bankruptcy necessitates the completion of a hefty bundle of forms. Almost all bankruptcy attorneys use specialist software to create and file the necessary bankruptcy documents with the court.
You will furnish your attorney with all of your financial details, including income, expenses, assets, and debts. It will be used by your lawyer to generate formal forms, and you will look over the completed documentation with him or her to confirm accuracy.
You may also be required to submit additional paperwork or documents to the court or the trustee. Your attorney will make certain to do so as soon as possible because failing to meet a bankruptcy deadline might result in:
- pauses in the progress
- your case being dismissed, or
- other negative consequences
For these reasons, knowing the local rules and filing procedures is one of your bankruptcy attorney’s obligations.
#4. You can expect your Bankruptcy Attorney to represent you during hearings.
Following the filing of a bankruptcy petition, all debtors are required to attend a mandatory hearing known as the 341 meeting of creditors. However, depending on the circumstances of your case, you (or your attorney) may be required to attend additional hearings.
You can expect your attorney to represent you at the following types of hearings:
- Confirmation hearings under Chapter 13
- Hearings on Chapter 7 reaffirmation, and
- any additional motions or objection hearings filed by you, your creditors, or the trustee
In most cases, your attorney will be able to advise you about the hearings you can expect to attend before you file your bankruptcy case.
What Does a Bankruptcy Attorney Charge?
Lawyer fees for bankruptcy vary depending on the form you choose, the complexity of your case, and your location.
The standard rate for a Chapter 7 bankruptcy attorney is $1,500 and $3,500 for Chapter 13. Other bankruptcy attorney costs include a filing fee of $338 for Chapter 7 and $313 for Chapter 13); and fees for credit counseling and financial management courses, which both cost from $10 to $100.
Why Is a Bankruptcy Attorney Worth the Money?
The most significant advantage for you is that an experienced attorney quickly recognizes any potential hiccup that may arise during your case and plans accordingly. Here’s a taste of what a qualified consumer bankruptcy attorney can do for you.
#1. Bankruptcy Plannning:
Consider alternatives to filing for bankruptcy. Bankruptcy may not be the only option for achieving financial stability. If bankruptcy is not the best option, your attorney will recommend a suitable bankruptcy alternative.
Decide which type of bankruptcy to file. Chapters 7 and 13 achieve different goals and serve different functions. For instance, Chapter 7 will wipe out a lot of debt in a short time, but it won’t help you save a house if you’re behind on your payments. Your attorney will carefully consider your wants and needs before recommending a course of action to help you achieve those objectives.
Read Also; Types of Bankruptcy: For Businesses and Individuals
#2. Preparing for Bankruptcy:
- Use the means test. The means test determines whether you qualify for Chapter 7 bankruptcy or if you can afford to make Chapter 13 installments. Any particular circumstances you give will be understood by an attorney.
- Consider your property’s worth. Do you know how to appraise a dining room set or a 5-year-old television? Your attorney will ensure that you disclose and correctly appraise your assets.
- Exemptions can be chosen and applied. Every jurisdiction has its own exemption scheme for keeping property in bankruptcy. Your attorney will know how to apply the exemption rules to protect as much of your assets as feasible.
- Determine Debt Discharge. Some debts are not discharged (wiped out) in bankruptcy. Others are only removed if certain requirements are met. Your attorney will clarify which debts will be discharged and which will be kept.
#3. Throughout Your Bankruptcy:
- Finish all of the schedules and paperwork. Under penalty of perjury, you will file pages of financial data about your debts, income, expenses, assets, and recent financial transactions. Your attorney will understand what you must disclose, how to value your assets, what constitutes income, which expenses are “reasonable and necessary,” which tax returns to provide, and a variety of other issues.
- Assist you in navigating the bankruptcy process. Your attorney will explain and prepare you for what is to come, such as the role of the bankruptcy trustee and the judge, the steps you must take to qualify for a discharge, and the actions that your creditors can take.
- Provide complete and accurate testimony. You must sign your bankruptcy paperwork under penalty of perjury, telling the court that the information is correct as far as you know. You’ll swear or affirm that you’re telling the truth at your creditors’ meeting and any other time you’re in court. Your attorney will accompany you to ensure that your testimony is accurate and complete.
- Handle creditors who violate the automatic stay. Some creditors simply don’t know when to stop collecting. If a creditor violates the automatic stay (the injunctive order that prevents collection efforts after the case is filed), your attorney can demand compliance or ask the court to hold the creditor in contempt.
Read also: BACK OF CHECK: How to Sign, What to Write & Wrong Endorsement Solutions
- Negotiate with your creditors. In Chapter 7 bankruptcy, your attorney can arrange a reaffirmation agreement or a redemption with a secured creditor, allowing you to keep your house or automobile. In Chapter 13 bankruptcy, your attorney will negotiate with your creditors on payment terms, the value of collateral (property that secures payment of a debt), and interest rates to make your repayment plan feasible.
- Modify a Chapter 13 repayment plan. If your circumstances change during your Chapter 13 bankruptcy case, your attorney can assist you in asking the court to make a temporary or permanent amendment to the provisions of your Chapter 13 plan, or to obtain an early discharge due to hardship.
#4. Rebuilding Credit After Bankruptcy
Overall, attorneys are effective at ensuring that your case moves smoothly through the process, allowing you to take full benefit of your fresh start. Even yet, things do happen after the fact that requires attention (although this is rare).
If a creditor seeks to collect a debt that was discharged in bankruptcy, your attorney can assist you in resolving post-bankruptcy discharge breaches. In addition, many attorneys offer advice on how to rehabilitate credit. They’ll provide you with helpful hints to help you take advantage of the offers you’re sure to receive quickly after your case is completed.
Signs You Need a Bankruptcy Attorney
Financial difficulty does not usually occur suddenly or abruptly. It’s usually a gradual process, with several flare warnings that things are deteriorating.
When warnings are disregarded, your finances can go up in flames, and it’s too late to do anything about it but declare bankruptcy.
Some obvious symptoms that bankruptcy may be in your future include:
- You merely make the minimal monthly payment on past-due invoices.
- Your credit cards are maxed out, and your debt is increasing rather than decreasing each month.
- You use credit cards to pay for everyday necessities such as groceries, rent, or utilities.
- Each month, you pay overdraft fees.
- Collection companies are phoning your home all hours of the day and night.
- Creditors are suing or threatening to sue you for unpaid bills.
- You are not eligible for debt-relief services such as debt management or debt consolidation loans.
- A job loss, divorce, or medical catastrophe turns your finances upside down.
Bankruptcy is not normally the first option for debt relief, but it can be a good answer in many circumstances. Of course, there are certain disadvantages. It can harm your credit for 7-10 years and make obtaining security clearances difficult.
However, if you are unable to fix your difficulties in fewer than five years, bankruptcy may be an alternative.
How to Locate and Contact a Bankruptcy Attorney
Several web directories promise to assist you in locating a bankruptcy lawyer in your area. However, keep in mind that many of these directories only include attorneys in exchange for a fee and do not guarantee their competence. Apply a critical eye to whatever listing you look at.
Begin with these two resources:
- The American Bar Association.
- The National Association of Consumer Bankruptcy Attorneys.
The ABA website identifies lawyers and companies that fulfill their qualifications for lawyer recommendation, and you can comb through the results to find attorneys that specialize in bankruptcy. You can also lookup local resources through your state’s bar association.
Only bankruptcy attorneys are listed in the NACBA directory. The group is dedicated to assisting consumers in bankruptcy and attorneys that specialize in this area. However, because the NACBA’s membership qualifications are fairly liberal, membership does not always imply quality or experience.
In addition to these directories, if you are comfortable doing so, ask friends and coworkers for referrals.
Contact a few attorneys who appear qualified and set up a consultation with each of them. Some attorneys offer free consultations, while others charge a fee of roughly $35 for this initial encounter. Don’t assume that because there is no fee, the lawyer is less qualified; starting with free consultations can help you feel comfortable interviewing lawyers and may lead you to the one you want.
Aim to learn three things at each meeting:
- Is the attorney knowledgeable enough to assist you?
- Are the fees appropriate?
- Would you feel at ease working with this person?
#1. Expertise and knowledge
Navigating the bankruptcy laws successfully necessitates a thorough understanding of the subject matter as well as the experience to know how to apply it. A faulty form or a missed deadline could result in the dismissal of your lawsuit. That is why finding a specialist is critical.
“Using an attorney who is not specialized in bankruptcy can be quite dangerous because they may not understand how to interpret this intricate area of the law.” “says Dan LaBert, executive director of the NACBA. “You wouldn’t go to a dermatologist if you had a heart problem.”
Inquire with the attorneys you contact about their specific expertise or background. Those who have received bankruptcy certification from the American Board of Certification have demonstrated that they know their way around the bankruptcy code better than the ordinary attorney. An attorney’s membership in NACBA also indicates that he or she is committed to advocating for people going through bankruptcy.
Inquire with the attorney you meet with how many Chapter 7 and Chapter 13 bankruptcy they’ve handled. Also, keep in mind that a skilled bankruptcy lawyer will consider alternatives to bankruptcy with clients, such as credit counseling.
#2. Compensation that is appropriate for your circumstances
There is no “correct” amount that a bankruptcy attorney should charge, however in general, a Chapter 13 filing will cost more than a Chapter 7. Fees vary from case to case and from state to state.
LaBert estimates that a Chapter 7 bankruptcy attorney will cost between $500 and $3,500, while a Chapter 13 bankruptcy will cost between $1,500 and $6,000, respectively. The more intricate the matter, the more expensive it is going to be. During your initial conversation, inquire about the attorney’s pricing structure and ensure that you understand what services are included.
According to California bankruptcy attorney Cathy Moran, the most important thing is to make sure you’re receiving your money’s worth for your individual case. “You need to know what’s at risk for you when you choose a bankruptcy counsel,” Moran adds. “If you have few assets and don’t have much to lose, a Smart Car or Ford Escort is a good choice.” But if you have a property with equity or a dispute with someone terrible, you need an Audi or a Lexus — you need some horsepower.”
#3. Communication and compatibility
Before you engage an attorney, consider whether you feel comfortable being candid with him or her.
“I believe that the quality of communication is vital because if you don’t feel comfortable… revealing what you’re worried about if you hold secrets, it will be a deal killer for your case,” Moran explains. Moran claims that she would “have no means of knowing if my and your judgment of the scenario is correct” if she did not have all of your information.”
You and your bankruptcy attorney have a big job ahead of you: making sure you get the finest deal possible for your situation. That will need difficult conversations, and a commitment to open communication will be beneficial.
“It truly comes down to having a compatible personality with the attorney,” LaBert explains. “Your attorney is not going to be your buddy or pal. They’ll give you tough counsel, and it’ll often be about your spending habits. But, in the end, the attorney must create a pleasant environment for the client.”
Be aware of “bankruptcy mills,” or law companies that handle so many bankruptcy cases that they can’t give yours the time and attention it requires. If you are unable to work one-on-one with the attorney during your initial appointment to vent your concerns and discuss your case, you should consider seeking representation elsewhere.
Can a One seriously consider doing this Pro Se?
It is feasible to file for bankruptcy pro se (on your own) and be successful if you have a lot of time, patience, and devotion, not to mention an understanding of legal procedures and language.
It is not advised, although it is possible.
Bankruptcy matters are heard in federal courts, which immediately raises a difficulty. To submit a case, you must complete and file your petition in a specific manner, otherwise, it will never appear on a judge’s docket.
There is also the issue of completing all of the paperwork required for either a Chapter 7 or a Chapter 13 bankruptcy. Even excluding one document can result in the dismissal of your bankruptcy case.
The United States Court System has made the procedure a little easier by providing a fillable PDF form that can be used to present a Chapter 13 file. They hope to have all essential forms available online eventually, which will make it easier for pro se filers to manage their own cases. However, this does not fix every problem. The availability of documentation is merely one issue. You must understand how to properly fill it out.
Then there’s the problem of arguing your case in front of a judge, who understands the law, processes, and remedies for situations and can dismiss your case at any point if you don’t follow them.
Yes, you can file for bankruptcy on your own, but do so at your own risk.
What Are My Alternatives If I Can’t Afford a Bankruptcy Attorney?
If you cannot afford the fees of a bankruptcy lawyer, you may be able to:
- Represent yourself as a “pro se” debtor.
- Bargain for lower attorney fees
- Pay your fees as part of your Chapter 13 repayment plan
- Seek assistance from a free legal clinic or a legal aid organization.
- Find a pro bono attorney who will take your case for free.
#1. Representing Yourself
You do not need an attorney to petition for bankruptcy. However, whether or whether hiring one is in your best interests will be determined by the following factors:
- The kind of bankruptcy you intend to file
- Your case’s intricacy, and
- If you’re willing to perform the necessary research
Bankruptcies under Chapter 7 are simple. Filers with little or no income or assets, as well as no other issues that could complicate a bankruptcy, may be able to file on their own. Even a basic Chapter 7 bankruptcy, on the other hand, needs a significant amount of effort and investigation. If you are unwilling to make the necessary commitment, your bankruptcy may be dismissed. You may also endanger your property. If you wish to file without an attorney, at the very least, purchase a self-help book like Nolo’s How to File for Chapter 7 Bankruptcy.
Bankruptcies under Chapter 7 and Chapter 13 are both complicated. Complex Chapter 7 cases, as well as nearly all Chapter 13 bankruptcies, necessitate substantial knowledge of bankruptcy law and present numerous dangers for inexperienced filers. For these reasons, you should consult with a bankruptcy lawyer. In many circumstances, you will be able to pay a substantial percentage of your attorney fees under your Chapter 13 repayment plan. Even if you can’t afford a bankruptcy lawyer, you should consider speaking with one. Many attorneys offer free consultations. You might discover hidden threats in your case.
#2. Negotiate Lower Bankruptcy Attorney fees.
If you cannot afford the advertised fees, you can attempt to offer the attorney a lower amount. The lawyer may agree to take your case, especially if you have a modest salary. Also, do some window shopping. Other area attorneys may charge a lower fee.
#3. Consult with a Free Legal Clinic or a Legal Aid Society.
Several free legal clinics and legal aid organizations help low-income people with their legal requirements. In addition, some bankruptcy courts and law schools establish clinics or information centers to assist self-represented debtors with their cases. To locate your local bankruptcy court, visit the U.S. Court Federal Court Finder.
#4. Locate a Pro Bono Attorney
Every year, some attorneys take on a specific number of cases pro bono (for free or at a drastically reduced rate). If you cannot afford the services of a bankruptcy attorney, you may be able to find a lawyer who will take your case on a pro bono basis. More information on pro bono attorneys can usually be found online, through your state bar, a local bar association, or by speaking with local lawyers. Alternatively, use the American Bankruptcy Institute’s Pro Bono Locator to get started.
What is the process of finding a bankruptcy attorney?
Having a competent and experienced attorney to guide you through the bankruptcy process is crucial, but finding one can be a challenging and confusing process. Your friends and family may be able to recommend a bankruptcy lawyer you can consult with. Bankruptcy lawyers in your area may be researched online for ratings and reviews. It is recommended that you meet with multiple lawyers for consultation so that you can evaluate their individual skill sets. You should assess the lawyer’s approachability, personality, and fees by asking the right questions.
How do I prepare for a consultation with a bankruptcy attorney?
Before your consultation with a bankruptcy attorney, it is important to prepare by gathering all relevant financial documents, such as your recent pay stubs, tax returns, and bills. You should also be prepared to discuss your financial situation, including your income, expenses, assets, and debts. This will help the attorney get a better understanding of your situation and provide you with more accurate and relevant advice. Additionally, be prepared to ask any questions you have about the bankruptcy process and the attorney’s experience and qualifications.
What are the benefits of hiring a bankruptcy attorney?
There are many benefits to hiring a bankruptcy attorney, including the peace of mind that comes with having an experienced professional guide you through the process. Bankruptcy attorneys can help you navigate the complex legal system, ensure that you are filing for the right type of bankruptcy, and help you keep as much of your property as possible. Additionally, bankruptcy attorneys can negotiate with creditors on your behalf and help you rebuild your credit after the bankruptcy process is complete.
What is the role of a bankruptcy attorney in the bankruptcy process?
The role of a bankruptcy attorney in the bankruptcy process is to provide legal guidance, representation, and support. The attorney will help you understand the different types of bankruptcy, the eligibility requirements, and the steps involved in the process. They will help you prepare and file the necessary paperwork, represent you in court, and negotiate with creditors on your behalf. The bankruptcy attorney will also help you understand the long-term impact of bankruptcy on your finances and help you rebuild your credit.
What is the average salary for a bankruptcy attorney?
The average salary for a bankruptcy attorney can vary greatly depending on several factors, including their location, experience, and type of employer. According to Glassdoor, the average salary for a bankruptcy attorney in the United States is $115,000 per year. However, some bankruptcy attorneys can earn significantly more, especially if they work for a large law firm or have a specialized niche in the field.
How much experience do bankruptcy attorneys have?
A bankruptcy attorney’s level of experience may vary widely. Filing for bankruptcy can be a complex and time-consuming process, and while some bankruptcy attorneys may have only a few years’ experience, others may have decades. Finding a good bankruptcy lawyer requires thinking about their level of experience and their history of winning bankruptcy cases for their clients. Inquire about the lawyer’s background, check online ratings and reviews, and contact some of their previous customers to get a feel for their professionalism.
Bankruptcy Attorney FAQs
Why should I hire a bankruptcy lawyer?
If you are thinking about filing for bankruptcy, you should consult with an experienced bankruptcy lawyer to help you navigate the process. A lawyer will make the process of filing bankruptcy simpler, faster, and more successful. Although you are permitted to file for bankruptcy on your own, doing so is frequently a costly error.
How much debt do you have to have to file Chapter 7?
There is no minimum amount required to petition for bankruptcy. Some bankruptcy chapters contain debt limits, but there is no such thing as a debt minimum. That being said, you can and should assess if filing for bankruptcy makes sense in your current position.
Can I keep my car if I file bankruptcy?
If you file for Chapter 7 bankruptcy and local bankruptcy laws enable you to exempt all of the equity in your car, you can keep it—as long as you keep up with your loan payments. The car is protected if you have less equity than the exemption level.
How do I file for bankruptcy if I have no money?
Eligible applicants can file a Chapter 7 bankruptcy for free. If your family income is less than 150 percent of the federal poverty line, you can request that the bankruptcy judge waive your court fees by submitting a brief application along with your bankruptcy petition.
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