Although hiring bankruptcy attorneys is not a requirement to file bankruptcy, going it alone can be the biggest financial mistake you will ever make. The new laws enacted under the Bankruptcy Abuse Prevention and Consumer Protection Act have made filing personal and business bankruptcy complex and complicated. One mistake could cause your bankruptcy petition to be dismissed.
Bankruptcy attorneys specialize in helping debtors obtain financial relief through appropriate bankruptcy chapters. Most lawyers specialize in either corporate or personal bankruptcy; although some represent all clients.
Personal bankruptcy includes chapters 7 and 13. Chapters 9 and 11 are used for corporations and partnerships, although certain individuals can apply for Chapter 11 bankruptcy if they meet certain criteria. Chapter 12 is reserved for farmers and fishermen.
In order to make the best selection, financial experts recommend consulting with a minimum of three bankruptcy attorneys. Realize you will be working with a legal team consisting of your lawyer, paralegals and office staff members.
Paralegals are oftentimes responsible for the bulk of the bankruptcy paperwork. This allows lawyers to maintain affordable fees because paralegals are compensated at a lower hourly rate than attorneys. When consulting with potential bankruptcy attorneys request the presence of paralegals and staff members who will work on your case.
It is important to work with attorneys familiar with the new bankruptcy laws. Under BAPCPA, debtors are required to undergo the ‘means’ test to determine the amount of debt which must be repaid. Nearly all debtors filing for personal bankruptcy are required to petition the court for Chapter 13.
Several options exist for locating bankruptcy attorneys. If you have a lawyer handling other legal affairs, ask for a referral. Most attorneys network with colleagues and are familiar with their areas of expertise.
Ask friends, relatives, co-workers or neighbors who have filed bankruptcy for a referral. Since this can be a delicate matter, it is best to discuss this topic in private. It is not a good idea to broadcast your need for a bankruptcy attorney in the presence of co-workers or those who participate in gossip.
The American Bar Association provides a nationwide list of bankruptcy attorneys. ABA does not provide direct referrals; however, a list of licensed lawyers and their contact information is published at abanet.org.
After compiling a list of bankruptcy lawyers call each law firm to arrange a consultation. Most attorneys provide complimentary consultations to determine if they are the appropriate lawyer to represent your case.
Bankruptcy lawyers will require financial documents including a list of income and expenses, banking and investment statements, mortgages, credit card debts, inventory list of valuable assets, and previous years’ tax returns. These documents can help bankruptcy attorneys determine which chapter is most appropriate for your needs.
In closing, it is important to work with lawyers who are receptive to your needs, answer your questions, and place you at ease. Undergoing bankruptcy is a stressful process. There is no need to add additional frustration by working with a lawyer who is impatient, non-responsive or rude.
California real estate investor, Simon Volkov, specializes in buying homes from people facing bankruptcy and foreclosure. Simon has published multiple articles about personal bankruptcy, bankruptcy alternatives, and tips for hiring bankruptcy attorneys via his website at www.SimonVolkov.com.