5 Helpful Tips for Hiring a New Bankruptcy Lawyer
Are you having a hard time paying your bills? Maybe you’re constantly being harassed by those aggressive creditors. The chances are that you’ve already begun your search for a new bankruptcy lawyer, but while it might be tempting to hire the first one you find, it’s not always the ideal solution. These 5 tips can help you determine if your potential attorney is right for your case.
1. Make sure they have bankruptcy experience
Look for a licensed attorney that has experience with bankruptcy cases. Ask questions to get information on what percentage of the practice or law firm works on bankruptcy cases and how many they have filed. Also, be sure to find out the types of bankruptcy cases they’ve handled, whether it’s Chapter 7, Chapter 11, or Chapter 13.
2. Avoid bankruptcy mills
These are typically firms that handle large amounts of cases without focusing on the details or specifics of any one single case. It’s also crucial to avoid attorneys that might use an assembly line approach. When you seek legal advice for your bankruptcy case, you might also come across people who will be willing to fill out the proper paperwork for you, but they’re often not qualified attorneys that should be giving you advice.
3. Choose a local practice
When you seek legal help from a local practice, you’ll be able to ensure that the lawyer or attorney you work with will be familiar with the local rules and procedures. They’ll be able to file your case and understand the specifics.
4. Look for availability
While it can be tough to determine how long your case will go on, it’s essential to have an attorney provide you with the proper amount of attention and availability. Be sure that you’re aware of who will handle your case, who will prepare all of the paperwork, and specific timeframes as things go on.
5. Reasonable prices
It would be best if you tried to avoid hiring a bankruptcy lawyer that advertises cheap services and aggressively pushes their services, but be sure to seek out ones that still have affordable rates. This is especially important since you’ll already be short on money.
Bankruptcy FAQ
Bankruptcy is a section of the law that allows debtors who are unable (fully or partially) to pay their outstanding debts to get a fresh start and get financial relief. Keep in mind that not all debts qualify to be removed in a bankruptcy case (e.g., student loans). The U.S. Supreme Court explains bankruptcy law as a way to give individuals and entities a new opportunity in life by starting fresh without the pressure and discouragement of preexisting debt. Federal bankruptcy law consists of chapters published in the Bankruptcy Code.
The U.S. Bankruptcy Law covers six different types of bankruptcy, each described in a separate chapter in the Bankruptcy Code. Although they differ in terms and procedures, their common goal is to provide permanent relief from certain outstanding debts. In other words, they help to discharge the debtor’s dischargeable debts. These are the different types of bankruptcy you can file:
Chapter 7: This chapter provides liquidation of the non-exempt assets of the debtor. Certain assets, like a car or a home, may be exempt from bankruptcy, which means the debtor can likely keep them under this chapter. The court appoints a trustee who will oversee the debtor’s non-exempt assets and will handle their sale. The proceeds will go to the creditors. Chapter 7 is open both to individuals and businesses.
Chapter 9: This chapter is intended to help municipalities to reorganize their debts. It is open to towns, cities, villages, municipal utilities, taxing districts, and school districts.
Chapter 11: Intended to help partnerships and corporations, chapter 11 bankruptcy aims to provide a supervised reorganization of a business by allowing the debtor to keep running the business while following a court-ordered payment plan.
Chapter 12: It consists of bankruptcy provisions for family farmers and fishers.
Chapter 13: It is aimed at helping individuals with a steady regular income to create a repayment plan, usually within three to five years, and discharge the remaining dischargeable debt.
Chapter 15: This chapter applies to cross-border bankruptcies that involve foreign parties.
Since bankruptcy can have a lasting negative effect on your credit, you should consider it a last resort option. It is a good idea to hold off on filing if you believe there is a chance to improve your financial situation or that you will have substantial expenses in the near future because there is a limit to how often you can file for bankruptcy.
The moment you file for bankruptcy, this will trigger an automatic stay that will stop wage garnishment, lawsuits, foreclosure, and collection efforts. So, if you want to stop the repossession of your car or the foreclosure of your home, and you have the income to pay off that debt, it may be a good idea to file for Chapter 13, for example. Of course, you should ideally consult with a lawyer before you take any legal action.
Is there a specific amount of debt to qualify for bankruptcy?
Generally speaking, there is no preset minimum amount of debt you need to qualify for bankruptcy. However, certain debt limits apply to Chapter 13, for instance. The maximum amount changes constantly, but it currently is $383,175 for unsecured debt and $1,149,525 for secured debt. If your outstanding debt is relatively low, it’s wise to consider alternative solutions to bankruptcy to ensure that filing for one of the six chapters is still an option for you in the near future. It’s an important consideration because there are limits on how many times a person can discharge debts in bankruptcy.
It is possible, but it depends on the type of debt you have. Most consumer debt can be discharged in a bankruptcy case, but if you forget to include a debt in the process of filing, it will not be discharged. In addition to that, creditors have the right to object to the discharge of any debt.
There are 19 categories of non-dischargeable debts that cannot usually be eliminated (unless a creditor decides not to challenge your effort to discharge them). Some of them include child support, alimony, certain tax debts, criminal restitution, and condo fee debts.
Do I need a lawyer to file for bankruptcy, or can I do it on my own?
It is allowed for individuals to file for bankruptcy without a lawyer. Debtors who decide not to use legal help in the filing process are responsible for understanding local court procedures and what relevant bankruptcy laws apply to them. In general, however, bankruptcy law is very complex and can be confusing. Understanding the process is key, and it is a good idea to consult with a bankruptcy lawyer about your circumstances to ensure you get the best outcome.
