If you have decided to file for bankruptcy, the next logical step is to hire a competent attorney to oversee your case. A lot of attorneys even offer a free consultation upfront so that you can decide if they are a good fit for you. We suggest taking more than one free consultation to gather the most information and find a lawyer you are comfortable with.
Knowing the right questions to ask will help you to take advantage of this opportunity to the fullest. Here are the 7 most important questions to ask a bankruptcy attorney
1. Should I File Bankruptcy?
If you have come this far, chances are you have done some research and have at least almost reach a decision. But there are likely still some things a bankruptcy attorney might know that you do not. For example, you may have some better alternatives available to you that you have not yet considered. Debt counseling, consolidation, and home equity loans may be viable alternatives for you and they don’t have the same negative impact on your credit rating.
If bankruptcy actually is the best option for you, however, a good attorney should be able to give you valid reasons why.
He/she should also be able to tell you why the other alternatives won’t work in your situation.
2. What Information Will I Need in Order to Start the Proceedings?
It is important to note here that you need to be as open about your financial situation as possible. A lot of people are embarrassed to divulge certain facts, but your bankruptcy attorney needs full disclosure to get the best picture of how to help you. Some of the information you will need includes:
- Any owned assets, including bank accounts, vehicles, homes, etc. Along with the list, you will eventually need to provide payment information, purchase dates and prices and lending companies.
- All credit card information, including amount owed and recent statements.
- All sources of household income, including spouse’s.
- Any legal proceedings involving finances you have been involved in, including divorce, judgments, liens, repossessions, past bankruptcies, foreclosure, etc.
- Any pending changes to your financial situation, such as raises, demotions, layoffs, etc.
- Any pending large purchases, such as vehicles, houses, etc.
3. Should I File Chapter 7 or Chapter 13?
The two types of bankruptcy you will have the option to file are chapter 7 and 13. It is very important for an attorney to advise you well in this decision as it affects your credit and your finances very differently. But each comes with its own requirements.
4. How Will Bankruptcy Affect my Assets?
Depending on the type of bankruptcy you file, you may or may not be allowed to keep certain assets.
Chapter 13 will allow you to keep your property, but you will have to be put on a strict 3-5 year repayment plan to pay back your debts.
Chapter 7 will require you to liquidate your assets and the courts will dole that money out to your various debtors.
5. How Long is the Process?
Chapter 7 bankruptcy usually takes just a few months to complete, but chapter 13, because of the nature of its payment plans, takes 3-5 years. It’s also important to note that if you default on payments in a chapter 13 bankruptcy, you may be switched to a chapter 7 and be required to pay additional fees for filing.
6. How Experienced are You in Bankruptcy Proceedings?
Because this is such a delicate matter, your attorney should be experienced in the area. You can ask questions like, “How long have you been a bankruptcy attorney,” or “What percentage of your cases involve bankruptcy.
It’s important to find out how knowledgeable they are before you decide on who you will hire.
7. How Much Will This Cost Me?
This is an important question many people overlook because they just assume it costs the same no matter who their attorney is. But this is not the case. The bankruptcy itself comes with its own filing fees. For chapter 7, the filing fee is $335 and for chapter 13, it is $310. But in addition to these fees, you will have to pay for credit counseling and money management courses often required by the courts. And your attorney will have their own fees which vary from case to case.
Bankruptcy is not an easy decision for anyone, but if you feel that you are at the point where nothing else will work, then it can certainly be a viable option. Just make sure you know who you are hiring to help with your case and explore other options first. The last thing you want is a messy bankruptcy hearing that has to be re-filed because of some error or overlooked factor. Do your homework and make the choice that makes sense for you.