How To Hire A Bankruptcy Lawyer



In today’s article, our experts at discuss how to hire a good bankruptcy lawyer.

If you’re drowning in debt and are in a difficult financial situation, you have probably thought about filing for bankruptcy.

Filing for bankruptcy is not an easy decision to make especially because it has a negative impact on credit reports and morale. However, over 1 million people filed for bankruptcy in 2013. If you find yourself in a severe financial crisis and your debts are accumulating and everything spinning out of control, you might want to consider hiring a good bankruptcy lawyer who may help you through the complex process of filing for bankruptcy while ensuring that your assets are protected.

Do I Need A Good Bankruptcy Lawyer?

It is common knowledge that bankruptcy is expensive, and nobody wants to increase those costs by hiring an attorney, however, hiring an attorney will be in your best interest.

While it is not a requirement of law that you hire an attorney to file bankruptcy, and there are a lot of people who attempt to file bankruptcy on their own, but filing bankruptcy without an attorney can be very risky. A 2011 report from the US Bankruptcy Court of Central California, indicated that 28% of bankruptcy filers did not use an attorney- nationwide 9% of filers choose to file on their own. With respect to Chapter 7 cases, 60.9% of people who filed on their own were successful, however, 94.5% of the people who filed with the assistance of an attorney were successful. The rules involved in the bankruptcy procedure are very complicated, and minor errors such as forgetting to list an asset, missing the deadline for filing documents or incorrectly filling out a form may result in you losing protections or have your case dismissed entirely.

Although the fees of a bankruptcy attorney may seem expensive, their expertise may make the difference between fully discharged debt and a dismissed case over a minor filing error.

How Do I Choose A Bankruptcy Lawyer

Conducting research when searching for a bankruptcy attorney may go a long way. It is not advisable to simply pick a name out of the phone book, or hire the attorney advertising the lowest fee, you may want to consider the following:

  • Contact family and friends for recommendations,
  • If you know attorneys who may specialize in other areas of law, you may ask them to refer you to a good bankruptcy attorney,
  • If you work for a big company, find out of they offer their employees a group legal plan,
  • Check with your local chapter of the American Bar Association
  • If you have little income or are unemployed, you should consider contacting a non-profit legal services organization. Even if they do not offer bankruptcy services, they may be able to recommend a good bankruptcy attorney.

Look for Expertise

Just as you would not go to a dentist for heart problems, you shouldn’t go to an attorney who does not specialize in bankruptcy for this complicated process. As soon as you have found a few attorneys who seem like they may be able to assist you, set up consultations with them to discuss your case. Most attorneys do not charge for the initial consultations and have no issue answering your basic questions face-to-face.

An important question that you should ask is how many years the attorney has been practicing, and how many bankruptcy cases has he or she dealt with. If the attorney is a member of a specialty law organization, like the National Association of Consumer Bankruptcy Attorneys, this will be an extra benefit to you as it generally means that the attorney has advanced training in the field.

You might also want to ask the attorney how many bankruptcy cases he or she handles per month, if its more than 30, it is likely that he or she may not have much time to spend on your case, and accordingly you might find that your case is not given the specific attention that it requires.

How Much Does A Good Bankruptcy Lawyer Cost?

It is advisable not to choose your attorney based on the amount that they charge. Keep an eye out for firms that advertise services much lower than the growing rate for attorneys in your area, as chances are you might be stuck with an inexperienced attorney who is not willing to take the time your case deserves.

The attorney should inform you of his or her costs upfront. There are a large number of attorneys who charge a fixed rate, which includes all hours spent on your case, time in court and filing fees.

In terms of Chapter 13 bankruptcy cases, the district courts set a limit as to how much bankruptcy attorneys can charge, this amount is different in each district, however it can be as high as $6,000; but $3,000 is the average. The rates for chapter 7 bankruptcy is not regulated by the court but it largely depends on the complexity of your case, it could range from $500 to $3,500.

Note that with a chapter 7 case, you will be required to pay the full amount of the fee upfront before your case is filed. Otherwise, the attorney would lose his fee in the bankruptcy process. However, in a chapter 13 bankruptcy, you may include all or a portion of the attorneys fees in your repayment plan.

Also see:

How Much Do Bankruptcy Lawyers Cost?

How Much Does It Cost To File Chapter 7?

How Much Does It Cost To File Chapter 13

You should have a compatible relationship with your attorney

Although your attorney does not need to be your best friend, you should feel comfortable working with him or her, and feel generally comfortable throughout the bankruptcy process. Go with you gut instinct, if you feel the attorney is not right for you at your first consult, that instinct is probably correct.

Are you filing for Chapter 7 or Chapter 13?

Most people filing personal bankruptcy will chose either Chapter 7 or Chapter 13. In terms of a Chapter 7 bankruptcy, non-exempt assets are sold to pay off creditors, and remaining debt is discharged. However, this excludes non-dischargeable debts such as child support and student loans.

Chapter 7 bankruptcy is the most suitable option for people with little income and assets, whereas Chapter 13 bankruptcy is a better option for those with higher income or more substantial assets.

With respect to Chapter 13 bankruptcy, as opposed to discharging debt, you will have a 3 to 5 year plan to pay off creditors, by the end of which most of your remaining unsecured debt will be discharged. A good bankruptcy lawyer will assist you with the decision as to which chapter best suits you.

Ultimately, this entire process can be emotionally and financially draining. But with the assistance of a good bankruptcy lawyer, you will be guided throughout this complex procedure, while keeping your stress levels at bay.