Anyone attempting to stave off bankruptcy is in a holding pattern of avoiding unnecessary expenses. It’s always wise to minimize costs. Before you agree to spending precious and limited funds on an attorney, consider asking the following questions:
“Can I do this without an attorney?”
The standard first question. The answer follows conventional wisdom: the simpler the case, the more likely it is you could handle it pro se (without an attorney.) A “simple” Chapter 7 case would be where you can prove income less than the state median, have little or no assets, and no priority debts like child support, alimony, unpaid taxes, or other non-dischargeable debts. These cases are in the minority. Simple or not, less than 10% of Chapter 7 cases are filed without an attorney.
Chapter 13 cases are inherently not simple, which makes Chapter 13 pro se filings even less common than their Chapter 7 counterparts. One of the first hurdles to overcome in Chapter 13 is the proposed repayment plan, which gets court-approved roughly 60% of the time when a lawyer is involved. Without a lawyer, this figure drops below a 2% approval rate. Setbacks like this can cause your case to get dismissed. Once the case is dismissed, you are no longer under the court’s protection. Your belongings can be seized and sold, creditors can take legal action against you, and the court’s protections may be limited if you re-file.
“Am I meeting with the lawyer?”
Sounds silly, but it’s not uncommon for law firms to have a salesperson interface with clients. It’s true that few successful lawyers would operate as they do without competent support personnel and paralegals. But it just isn’t realistic to think a salesperson has enough understanding of the pitfalls and exceptions in bankruptcy law, much less should they be offering legal analysis or advice. Your first consult should be with the actual attorney who asks the right questions and understands the possible outcomes. If you aren’t talking to the actual attorney, keep shopping.
“What is your fee and how will you be paid?”
You need to know what to expect, and when to expect it. Chapter 7 cases require that their attorney is paid in full prior to filing. Individuals filing Chapter 13 can spread their legal fees out over the life of their repayment plan, usually between 36 and 60 months.
Chapter 7 cases usually range from $1500-to-$3000, while Chapter 13 cases run between $3000-and-$5000. Factors that impact price are geographical location, complexity of the case, and experience level of the lawyer.
“If Chapter 13 is recommended, why?”
Solid reasons for choosing the Chapter 13 route over Chapter 7 are: protecting your home or car from foreclosure or repossession, failure to qualify for Chapter 7 due to high income, disqualification due to a previous Chapter 7 filing, or non-exempt assets. If your lawyer is recommending Chapter 13 for another reason, skepticism might be warranted.
Because legal fees for Chapter 13 cases are nearly twice as expensive as Chapter 7, some unscrupulous lawyers file under Chapter 13 to collect the higher fee. It’s unethical. Choosing the Chapter 13 repayment route should be dictated by your situation, not their profit margin.
Choose expertise and experience.
Attorneys are like doctors and mechanics; you choose the ones with the best reputation, the most knowledge, and the highest level of service. If you are considering bankruptcy, contact our team of professionals at the Law Offices of Jeffrey Lohman. We will give your situation a comprehensive evaluation and help you forge the best path forward. When used correctly, bankruptcy is a powerful tool that puts people back on track. Let us help you. Contact us today.
The Law Offices of Jeffrey Lohman, P.C. is considered a debt relief agency pursuant to federal law. We are attorneys who help people file for bankruptcy relief under the Bankruptcy Code.