Bankruptcy is a complex legal procedure with very specific rules. Most attorneys who handle bankruptcies are bankruptcy specialists and many lawyers who are not bankruptcy specialists will not take bankruptcy cases.
If you are considering bankruptcy, it’s important to discuss your situation with an attorney who specializes in bankruptcy cases. The attorney will help you decide whether bankruptcy is the right move for you and what type of bankruptcy you should use. Good legal advice may help you protect some of your assets and get the best possible deal out of your bankruptcy.
Why You Need a Bankruptcy Attorney
Bankruptcy law is a complicated field that is typically addressed only by specialist bankruptcy lawyers. Some lawyers even specialize in particular types of bankruptcies, usually Chapter 7 or Chapter 13.
It’s important to have an attorney who is familiar not only with bankruptcy laws but with the way judges interpret that law. It’s best to have a lawyer that practices in the jurisdiction where you’ll be filing and is familiar with the preferences and requirements in that particular court.
If your case is prepared by a lawyer that isn’t fully familiar with bankruptcy law you could end up spending more time than necessary in the bankruptcy process, losing assets that could have been protected and generally not getting as good a deal as you should have. Your case may even be dismissed.
Representing yourself in a bankruptcy process can be very risky. Consider these possible problems before you make that decision:
- The forms required for a bankruptcy filing are detailed and specific. If you make a mistake your case could be dismissed.
- The property exemption system is difficult to understand completely. If you don’t take full advantage of exemptions, you could lose assets.
- If a creditor files an adversary action or tries to have the discharge of a debt denied you will need an attorney’s help to defend yourself.
A bankruptcy lawyer is an additional expense at a time when you’re already under financial stress, but a good bankruptcy lawyer is likely to save you more than the cost.
How to Find a Bankruptcy Attorney
You are looking for an experienced attorney who specializes in personal bankruptcy cases and practices in the jurisdiction where your bankruptcy will be filed. Here’s where you start:
- Referrals from people you know. It’s not always easy to tell people you know that you’re considering bankruptcy, but it’s best to swallow your pride and ask. Someone in your circle might have been through the same process or know someone who has.
- Referrals from other lawyers. Not all lawyers are bankruptcy specialists, but the legal community is small and a lawyer who doesn’t handle bankruptcies is likely to know a few who do. If you know any lawyers, ask them.
- National, State and even County Bar Associations often have searchable databases that list attorneys by specialty.
- The National Association of Consumer Bankruptcy Attorneys (NACBA) has a searchable directory of bankruptcy attorneys. NACBA is an organization exclusively composed of bankruptcy specialists.
- Search the Internet. It’s always worth doing internet searches for consumer bankruptcy attorneys in your area. You may find sites with reviews or individuals discussing their experiences. There are also a number of online directories that will provide some options in your area.
At this stage, you are not trying to choose your attorney. You’re building a list of candidates for further investigation.
How To Evaluate a Bankruptcy Attorney
Once you have a list of candidates, the evaluation process begins. Take your time and be thorough. It’s an important decision.
Before you contact attorneys, check your state bar association’s records of ethics complaints and run their names through some internet searches. If an attorney has been practicing for some time, there should be some online discussion about them. Look for complaints or negative reviews. If there’s a consistent pattern of complaints, though, be wary.
Be wary of “bankruptcy mills”, which are law firms that handle so many bankruptcies that individual cases get little personal attention. If you work with a bankruptcy mill most of the work on your case may be done by paralegals, not your lawyer.
You will want to talk to several lawyers in person. Some lawyers give a free initial consultation, some will charge you. The ones that charge are not necessarily better or worse. Do some homework first: read up about bankruptcy and think about questions that you want to ask.
Here are some questions that you should ask a prospective lawyer:
- Ask about availability. Will you be talking mainly to the lawyer or a paralegal? Will the lawyer attend hearings with you? How quickly does the firm usually respond to calls, and do they charge for calls?
- Ask about experience. How many bankruptcies has the lawyer handled? How many were similar to yours? Most lawyers will be willing to give references, and you should contact them and ask about their experiences.
- Ask about your case. Ask specific questions about your case. You should get specific answers that refer to your situation, not comments about bankruptcy in general. It’s always useful to ask what type of bankruptcy is most appropriate to your case and why.
- Ask about fees and what services are included in the fees. Some attorneys may offer lower fees but less complete services.
- Ask about payment plans or delayed payment options. Lawyers that handle bankruptcies are accustomed to working with clients who are under financial stress. Many have developed systems to make payments easier.
These are two questions that a lawyer should ask you:
- The lawyer should ask detailed questions about your finances. A bankruptcy lawyer should always have complete information on your finances before making recommendations. If a lawyer recommends bankruptcy or a specific type of bankruptcy before fully understanding your situation, that’s a red flag.
- A bankruptcy attorney should always consider alternatives to bankruptcy. If the attorney assumes from the start that bankruptcy is your only option, that’s a bad sign.
Take notes when you talk to a lawyer. Write down your impressions and any specific comments and recommendations the lawyer makes.
Making Your Choice
Once you’ve spoken to each of your candidates, it’s time to choose. Consider these three elements:
- The facts. How much experience does each attorney have? Are they bankruptcy specialists? How available will they be? Were their specific comments on your case consistent with what you’ve read and what other attorneys said? Have they handled cases in the court where you’ll be filing?
- The feelings. These are subjective but equally important. Did you feel personally comfortable with the lawyer? Did the lawyer listen to you? Did you feel that the lawyer was telling you what you wanted to hear, or did you get the impression of a person who’s willing and to tell you harsh facts? Did the lawyer empathize with your situation and avoid judging you?
- The finances. What will you pay for the lawyer’s services, and what’s included in the package?
All of these factors are important, and you should consider them carefully before selecting your attorney.
What Can You Do if You Can’t Afford an Attorney?
Depending on the complexity of the case, a Chapter 7 bankruptcy may cost from $500 to $3,500 in legal fees and a Chapter 13 bankruptcy could range from $2,500 to $6,000. That can be hard to pay.
Discuss fees and payment plans with bankruptcy attorneys. They will often have payment plans or other ways to make their services affordable.
If you really cannot afford legal help, look for legal aid groups or free legal clinics in your area. They may be able to recommend options. Your State bar association may be able to recommend law firms that are willing to extend pro bono services. The Legal Services Corporation, a federal agency, offers a useful legal aid search page.
If you are filing a simple Chapter 7 and you have no or very few assets to protect, you may be able to manage with assistance from a non-specialist legal aid group or clinic. If you have substantial assets to protect, do everything you can to obtain the services of a specialist.
Bankruptcy is a difficult process that requires professional assistance. Professional assistance can be expensive and when you’re considering bankruptcy it’s hard to think about adding another cost to a list that’s already hard to manage.
Even if an attorney seems unaffordable you should retain one if you can. You are likely to save more than the fees cost you. Free assistance may be available, but a well-chosen professional will give you the best chance of getting the best possible deal out of your bankruptcy.