Working With a Bankruptcy Lawyer
Many debtors file for bankruptcy on their own rather than retaining an attorney, feeling reluctant to bear the additional cost. However, hiring a bankruptcy lawyer can help you approach the situation more strategically. An attorney can advise you on alternatives to bankruptcy so that you can make sure to choose the right path for you. They also can explain the process so that you are not surprised by anything that happens, such as the loss of some of your property.
The attorney will review your case with an eye toward any issues that the bankruptcy trustee or creditors might raise. They also will attend the Section 341 meeting of creditors and handle interactions with the trustee. If a dispute arises in the course of your bankruptcy, they can advocate for you in court or during settlement negotiations.
Issues to Discuss with an Attorney
One of the most critical areas in which an attorney may be useful is determining which chapter of the bankruptcy code should serve as the basis for your filing. An attorney can help you go through the means test to determine whether you are eligible for Chapter 7. If you are not eligible, or if Chapter 7 is not right for you, they can advise you on what you would need to do under a Chapter 13 repayment plan. This may involve asking you questions about your household, your income and expenses, your job, any previous bankruptcy filings, and tax payments.
Also, an attorney can advise you on the degree to which exemptions can cover your property. If exemptions do not cover everything, the attorney can help you weigh whether getting a discharge of qualifying debts would make the loss of your non-exempt assets worthwhile. They will carefully explore the scope of your assets and determine whether you have a substantial amount of non-dischargeable debt. (You should bear in mind that filing for bankruptcy may have benefits even if you do not get a full discharge of your debts. It can delay collection efforts and give you more time to pay your bills.)
If you need to file bankruptcy immediately, an attorney can help you file the paperwork efficiently and thoroughly. You may need to get relief right away if you are facing a foreclosure, an eviction, or the loss of your car, or if you are having money garnished from your bank account or wages, among other situations.
Fees for Bankruptcy Attorneys
The fees that bankruptcy attorneys charge vary widely by region. In some relatively ordinary cases, you might be able to retain an attorney for a modest flat fee. However, you should be aware that a startlingly low fee may be too good to be true. This might be simply a base fee to which the attorney adds extra amounts based on various circumstances in a bankruptcy. Some attorneys engage in deceptive advertising, so you should make sure that you understand your fee before signing a representation agreement.
At the other end of the spectrum, a fee that is unreasonably high can be reviewed by the bankruptcy court and potentially refunded to the trustee. In some states, a fee will be presumed reasonable if it falls within a certain range, although a court still has the authority to review a fee in this range. Fees in those states usually can go above the presumptively reasonable range, but the attorney will need to ask the court for approval, explaining why a higher fee is appropriate.
The fee should not be the only basis for choosing an attorney. You will want to arrange an initial consultation with an attorney whom you are considering. This may be free or offered at minimal cost. While the attorney’s staff can handle much of the paperwork in a bankruptcy case, you should make sure that any legal advice and advocacy come from a licensed attorney. You can ask people whom you trust for referrals, but you should still explore the attorney’s qualifications to decide whether you are confident in them.
