Ten Questions to Ask a Bankruptcy Attorney

17 Dec Ten Questions to Ask a Bankruptcy Attorney

Filing bankruptcy is a serious step, and a difficult one for most folks. In addition to being a step most people are very reluctant to take, it is a totally unfamiliar process, too. It can be confusing and stressful. How do you know that you’re asking the right questions? A lot has been written here about the importance of having an experienced bankruptcy attorney (see here and here for just a couple of examples). But how do you know that’s what you’re getting? Below are a few questions to ask your prospective bankruptcy attorney, just to get you started.

  1. How much of your practice is devoted to filing bankruptcy cases? That’s a better question than how long the attorney has been doing bankruptcy work, or how many cases he’s handled. After all, an attorney who has been doing two or three cases a year for 20 years may be less experienced over all than an attorney who has been doing nothing but bankruptcy cases for three years. The laws have changed, and it is difficult to keep up if bankruptcy is not a significant part of your practice.
  2. What is the best way to contact the attorney? I get a lot of phone calls, but the best way to contact me is by e-mail. I can answer e-mails faster, and I don’t have to go through the annoying telephone tag thing. But your attorney may differ. I also ask clients to leave detailed messages when they call, and to always leave a number. If I happen not to be at the office when I check my voice mail, I have no way to return the call until I’m back in the office. Ask now, and try to comply with the attorney’s preference.
  3. Is bankruptcy a good option for me, and why (or why not)? This covers a lot of ground, but an attorney should be willing to discuss your options, and explain her recommendations. I usually discuss both Chapter 7 and Chapter 13 with consumer clients, make a recommendation and explain why. Occasionally I will talk to someone who needs to make a decision that will affect that recommendation, but I can lay out the options. I also sometimes recommend against filing bankruptcy, for specific reasons.
  4. How will bankruptcy benefit me? You should have a clear understanding of the benefits associated with a bankruptcy filing. For example, a Chapter 7 may discharge most or all of your debt, and stop collection activity. A Chapter 13 may allow you to catch up mortgage payments, or restructure other debt.
  5. What are the negative effects of a bankruptcy filing? I try to give clients some idea of the negatives of filing bankruptcy, compared to the negative things that will happen if they do nothing. You should have a clear understanding of what property, if any, is likely to be considered an asset in a Chapter 7 case, or the steps a Chapter 7 trustee may take to make that determination. It is not always feasible to give an estimate of the amount of payments in a Chapter 13 case until all relevant information has been gathered, but you should have some idea of the information that will be needed.
  6. What information do I need to get started? Every attorney gathers information a little differently, and most of them ask for a great deal of information. Some will have you fill out forms, and others will conduct detailed interviews to get that information. There is no one “right” way, but a good attorney will want more information, not less.
  7. Who will go to court with me? In a lot of cases, there is only one “hearing” that you’ll have to attend, and you need to know who will attend with you. The answer should be an attorney, not a paralegal. Some law firms will have one attorney handle all the court cases on a given day, and as long as the attorney is familiar with your case, that should be fine. But, you should meet that attorney before you go. It will increase your comfort level just to know a familiar face. Some attorneys have formal or informal agreements to cover each other’s cases from time to time, and occasionally emergencies come up. At the very least, you should know who to look for, and be comfortable that the attorney has been briefed on your case.
  8. Do you use a written fee agreement? The answer to this question, without exception, should be “yes.” Some attorneys may hand you a written fee agreement practically the moment you walk in the door, which can be a little off-putting. There is good reason for this approach, and you should recognize it as a sign of the attorney’s commitment to the letter and spirit of the law. Even if you don’t get a written fee agreement on your first visit, it should be provided to you at the time you retain the attorney to represent you.
  9. What is included in the attorney’s fee? In most bankruptcy courts, an attorney who has filed a case is likely to be required to complete the case, so the fee will be adequate to cover most of the work that she anticipates must be done. But, most attorneys will also exclude certain work, usually things that come up only in rare instances. This avoids over-charging you for work that isn’t necessary, but you should have an understanding of what is included, when the representation starts and when it ends.
  10. How much is the attorney’s fee (and for many people, how can I pay it)? Note how far down the list this question is. This is the first question many people ask me, often on the phone before even setting up an appointment. It is important, but it should not be your only criteria. For one thing, until you know the answers to the other questions above, how can you tell whether the fee is fair, or compare it to someone else’s? Besides, “you get what you pay for” was probably invented to describe attorney fees.
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Bankruptcy Law Network (BLN)

  • Don LoVetere
    Posted at 08:11h, 06 June

    I have a question that I would like your comment on:

    Background: I have 4 rental properties that are under-water with over -$300,000 of negative equity, and have -$3,000 per month negative cash flows. Additionally, I have approximately -$135,000 of debt on my Credit Cards that have a $2,100 minimum payment required. My plan is to Chapter 7 shortly.
    Issue: While I pass the “means test”, I am concerned that for the Oct 2010 to May 2011 period I used the rental checks (approximately $6,000) to supplement my Pension ($1,200/mo) and our combined Social Security ($2,900/mo) to live on versus withdrawing $6,000 from my IRA as I previously had been doing.
    Question: What is the likelihood that the Trustee will not approve my Chapter 7 because I did not pay more of my creditors with the rent checks and instead used the majority of the money to live on?

    Note: For Oct – May six month period I began to prepare for the June 2011 filing by:
    1. I stopped paying the mortgages on the 4 rental properties in October 2010.
    2. I stopped paying the minimum payment required on the credit cards in October 2010.
    3. I did continued making payments on my home mortgage and also on both cars. All are current.
    4. I have no other secured or un-secured creditors.