Here at Woodall & Woodall, we realize that deciding to file for bankruptcy is never an easy decision. You're probably wondering, but where do I start? Here are some things to consider.
At Woodall & Woodall, we realize that bankruptcy is never an easy decision. There are many honest, hardworking consumers in the South Georgia area who are experiencing debt. Debt can come from credit card bills, medical bills, car payments, mortgage payments, taxes, student loans, and other financial obligations. These debts can make you feel as if there is no relief in sight.
When you have excessive debt, it can sometimes control every aspect of your life and keep you up at night. We understand this and are dedicated to helping residents of Valdosta, Thomasville, Tifton, Moultrie, and surrounding areas get back on their feet. We presently serve 35 counties in South Georgia.
[Make sure you understand every option available. Here's how bankruptcy protects you and stops creditor harassment.]
Many people may not know if they need to file for bankruptcy, but if your debt is spiraling out of control, it may be a viable option. Bankruptcy isn't a punishment; it's a tool that gives you a chance to make a fresh start. Bankruptcy also doesn't disparage your character nor is it a measure of your self-worth. Everyone experiences hardships in their life. You're probably wondering, but where do I start?
How Can You Determine If You Need A Lawyer?
Talking to a bankruptcy lawyer before making any decisions is always best because they can discuss your options. These can include paying off certain debts before filing for bankruptcy, waiting until a tax return is received to go ahead, and whether to file or not filing at all. A lawyer can help you assess your financial situation and determine whether there may be other debt relief alternatives that will help you. If bankruptcy is in your best interest, a lawyer can tell you whether you qualify for Chapter 7 or Chapter 13.
Some people may choose to represent themselves in bankruptcy court, and this is known as "pro se" filing. Why isn't this the best decision? Nationwide, only 9 percent choose to file pro se and there are some good reasons why.
Bankruptcy law is complicated and the United States court system highly recommends that you seek the advice of a qualified attorney. You might have the simplest of cases, but you'll still have to provide detailed information about your income, expenses, creditors, property, and financial transactions. Even if you do your research, it's easy to make a mistake and this can result in you being worse off than you were before.
[People often worry if their neighbors or friends are going to find out they filed for bankruptcy. There are very few ways someone could find out. Watch and learn to see why.]
Your creditors are almost always represented by counsel, and when that creditor's attorney is up against someone who has no knowledge of the law, there is a serious disadvantage. The court is not allowed to give someone special treatment simply because they are unrepresented. When you are filing pro se, you'll need to know what you are doing, and you'll also need to understand the legal arguments as they come.
These are some of the mistakes people make when they don't have the advice of an attorney:
- They file for bankruptcy when it's not the right choice.
- They file under the wrong bankruptcy chapter.
- They don't file the correct forms.
- They don't follow the rules of their local bankruptcy court or trustee.
- They don't use bankruptcy extensions properly.
- They don't file a realistic, or a reasonable, repayment plan.
When you are filing pro se, there is no one there to provide you with legal advice; no one to explain answers to legal questions, and there is no one to assist you in bankruptcy court.
Making sure that your bankruptcy is handled the right way will provide you with peace of mind.
What Should You Look For In A Bankruptcy Attorney?
When evaluating an attorney, there are three important things to consider - Expense, Experience, and Empathy. Let's take a close look at these.
Expense
When looking for an attorney remember that low cost is not always better. If their fee is drastically lower than other lawyers in your area, this can be a sign that the attorney doesn't do much bankruptcy work. They also might cut corners on your case. Typically, clients all pay the same initial filing fee, depending on if they file for Chapter 13 or Chapter 7 bankruptcy. Then, after filing, each case will vary in price due to a number of factors (explained further below.)
Keeping this in mind, be wary of a fee given on the phone before an attorney has done a complete evaluation of your case. How do they know how much to charge? They've never met you, nor have they seen any paperwork.
Attorneys' fees in bankruptcy cases are somewhat unusual because they must be disclosed to and approved by the court. Bankruptcy fees are not set by the court, but the court will often cap what a lawyer can make.
Your attorney's fees will generally depend on the complexity of your case, your location, and which bankruptcy chapter you can file, Chapter 7 or Chapter 13. What's the difference between these two chapters?
[The two common types of bankruptcy that individuals file are Chapter 7 and Chapter 13. Here's more on which type may be the right fit for you.]
Chapter 7
If you qualify for Chapter 7, typically you have limited income and don't have the ability to pay back all or some portion of your debts. Chapter 7 helps you liquidate your non-exempt property. This can include property that's not your primary home; a newer vehicle that has equity; musical instruments; a valuable coin or stamp collection; investments; valuable artwork; expensive clothing and jewelry. A trustee will sell this property and use the proceeds to pay your creditors. At the end of this process, remaining unsecured debt is "discharged," which means that it's forgiven.
Chapter 13
This type of bankruptcy is more for reorganization and is sometimes called a wage earner's plan. A debtor can make payments directly to the Chapter 13 trustee or through payroll deductions, and these installments are paid to creditors over three to five years. You are paying creditors a portion of the outstanding debt, and with Chapter 13, you must pay unsecured creditors an amount equal to the value of your nonexempt assets (generally you do not have to pay unsecured creditors anything.)
In a normal Chapter 13, you can cut your monthly bills in half (or more). If you successfully complete this repayment plan, you may be able to keep your property. After repayment, any remaining unsecured debts—such as credit cards and medical bills—may be "discharged." Chapter 13 lets you avoid foreclosure or repossession by allowing you to spread out any missed payments.
As discussed earlier in this post, most Chapter 7 and Chapter 13 agreements have standard flat filing fees. Then, the price of your case itself can vary. With Chapter 7, you will typically pay the attorney in full before he or she will file your case. These fees should include:
- Consultation and analysis of your financial situation
- The preparation of your bankruptcy petition
- A review of the petition
- Attendance at the meeting of creditors, known as a 341 meeting
- Follow-ups with creditors, such as taking action to halt any post-filing collection efforts
The difference with Chapter 13 is that you don't have to pay all your attorney fees upfront. In most cases, the attorney will ask for a portion of their fees prior to filing your case and the remainder will get paid through your repayment plan. The Chapter 13 fee should also include:
- The preparation of the reorganization plan
- The attorney's representation at the confirmation hearing
Sometimes with Chapter 13 there could be an adversarial proceeding, such as when the creditor will challenge the filing. In this case, that fee will probably not be included. Just be sure to ask what the attorney charges for any possible litigation that comes out of these proceedings.
Overall, remember low cost is not always better and that it may take some time for a reputable attorney to review your case and give you an estimate of fees.
Experience
If you live in Valdosta, Thomasville, Tifton, Moultrie or surrounding areas in South Georgia, you probably realize that there are several lawyers to choose from. But, how many specialize in bankruptcy law? While any lawyer could handle a bankruptcy case, it's best to use those who focus only on bankruptcy law. This is important for several reasons.
A lawyer can advertise that they have expertise in different areas, but are they true bankruptcy experts? A true expert is up to date on code changes and understands the most-minute details of the law and how it may impact you. You want to work with an attorney who regularly practices in this area and you want someone who is familiar with the details of the bankruptcy court where you are filing. You will also need a consumer bankruptcy attorney; someone who works with individuals, versus someone who works with businesses. Ask your attorney about the number of cases they file each month. We recommend looking for someone who is regularly filing at least twenty cases a month in your jurisdiction.
[Check out our Bankruptcy FAQ for answers to common questions about bankruptcy.]
Another thing to remember is that high volume law firms will work for you in some situations, but for bankruptcy cases, a smaller practice is best. Sometimes, when you have a high volume law firm, these practices are run as "bankruptcy mills". A bankruptcy mill will churn through a lot of cases and have little regard for their client's specific needs. The legal work is not always as good and there are clients that are unhappy. A small practice can take time with you, and also help address the personal issues that led to bankruptcy. With a bankruptcy mill, you're just another number while they continue to crank out more cases.
When shopping around, call at least a few attorneys in your area to compare their fees and ask if bankruptcy is an area they specialize in.
Empathy
Consider your relationship with your attorney and make sure you feel comfortable. Evaluate that first meeting. Did the lawyer listen to you? Did they seem trustworthy? Do you know why they practice bankruptcy? Did they take your emotions into account? Did you get clear, concise answers in plain English? Think about what they recommended. Do these recommendations make sense?
If there is a lack of openness, this could cause problems during the bankruptcy process. You want to work with someone with whom you have a good feeling. How available is your lawyer? Can you speak directly with him? How long does it take for calls to be returned? How hard is it to schedule appointments?
You need someone who works with you right from the beginning and who knows all the ins and outs of your financial situation. In this way, you'll be able to communicate freely.
An empathetic lawyer knows that this is a trying time and should be personable and caring. If you have any reservations, check and see what other people are saying.
Where Can You Find An Attorney?
There are a few ways to find an attorney, here's where to start:
- Ask around. You can always say that you have a friend looking for a bankruptcy attorney.
- Search online, check reviews, check websites, and then give them a call.
- Online referral services such as NOLO, AVVO and NACBA are great resources. These members value networking, stay up to date on law changes and are active in the legal community.
- Check with your Local Bar Association for recommendations. You won't find too many bankruptcy mills there because most mills don't do the kind of lawyer-to-lawyer networking that is customary for a local bar association.
After getting a few names, it's time to research and call around. See who is the best fit for you, your situation, and your case.
What to Ask: Your Checklist
As you're evaluating attorneys, don't be afraid to ask questions. Specifically, be sure to ask:
- Am I qualified for bankruptcy? If so, Chapter 7 or Chapter 13?
- How many bankruptcies have they done, and what types?
- What is the size of the practice?
- How quickly do they return calls?
- Do they charge for calls?
- How hands-on is the attorney?
- Do they file the paperwork?
- Do they accompany you in court?
Many bankruptcy attorneys offer free consultations, and this list of questions will help you sort through your options.
Conclusion
At Woodall & Woodall, we realize that bankruptcy is never an easy decision, but taking a little time to choose the right attorney will go a long way. Finding a solid advocate shouldn't be scary, and you shouldn't feel judged. By just focusing on the three E's — Expense, Experience, and Empathy — you'll be able to choose the best attorney to fit your needs.
