Bankruptcy Attorneys

Here’s how to decide if you need a bankruptcy lawyer and what to expect whether you hire an attorney.

What Types of Bankruptcy Are There?

The United States Bankruptcy Code defines six types of bankruptcy. But, when filing for bankruptcy as an individual, cases often fall under one of two types: Chapter 7 or Chapter 13.

Chapter 7, also known as liquidation bankruptcy, wipes out debts. It’s designed for people who’ve been unable to make monthly debt payments. In a Chapter 7 case, a court-appointed trustee sells your assets (liquidates them) for cash and distributes the proceeds to your creditors. Some assets may be exempt, such as your car or household furnishings. Once completed, Chapter 7 releases you from responsibility for all the debts covered in the bankruptcy case.

In a Chapter 13 bankruptcy case, also called a wage earner’s or repayment plan, the court approves a repayment plan that lets you pay off debts over a three- to five-year period. After these debts are paid, you’re no longer responsible for them. This type of bankruptcy may allow you to keep property that you could lose in a Chapter 7 case, such as a house that’s in foreclosure. Notably, you must make all of your mortgage payments on time during the Chapter 13 payment plan.

What Is a Bankruptcy Lawyer?

A bankruptcy lawyer specializes in giving legal advice to a client about bankruptcy, prepares legal documents for the client and represents the client in court. An attorney must hold a law degree and be licensed in the state where they do business.

As your guide through the bankruptcy process, a lawyer can advise you about matters such as:

• Whether to file for bankruptcy
• Which type of bankruptcy to file
• How the bankruptcy process works
• Which court-provided forms need to be completed
• What kinds of debts can be reduced or eliminated
• Whether you’ll be able to hang on to your home, car or other property after the bankruptcy case is finished

Overall, a bankruptcy lawyer can steer you in the right legal direction. If you handle a bankruptcy case without a lawyer, you may make legal mistakes that carry long-term financial consequences.

What to Expect From a Bankruptcy Lawyer

If you hire a bankruptcy lawyer, here’s what to expect:

• A written agreement, or contract, between you and the lawyer.The agreement will likely include an overview of the lawyer’s work for you.
• A description of payment arrangements.For example, will the lawyer charge an hourly or a flat fee? How much will the fees be?
• Ongoing discussions.You’ll talk about how the lawyer is handling your case.
• An agreement.You’ll agree on how and how often the lawyer will update you about your case.
• A list of documents.The lawyer should provide you with a complete list of documents needed for your bankruptcy case.

Do I Need a Bankruptcy Lawyer?

Representing yourself in court is an option. Whether it’s the right option for you depends on your situation. Keep in mind that you have better odds of a successful bankruptcy when hiring a lawyer. According to a 2018 study by the American Bankruptcy Institute, Chapter 7 pro se filers are nearly 10 times more likely than lawyer-represented filers to have their cases dismissed or some debt discharge requests denied.

Filing for bankruptcy can stay on your credit report for seven or 10 years, depending on the type of bankruptcy. Therefore, it’s important to consider hiring a bankruptcy lawyer. Here are three reasons you may need one:

1. You’re uncomfortable dealing with the bankruptcy case on your own.It can be intimidating to represent yourself in court, and a bankruptcy lawyer can take care of legal matters on your behalf.
2. You’re worried about the paperwork.Court cases typically involve a lot of documents. If you incorrectly fill out paperwork or turn it in past the deadline, for instance, it could endanger your bankruptcy case. A bankruptcy lawyer can keep the paperwork on track, including any documents (like credit card bills) that you must submit.
3. You’re tired of hearing from debt collectors.If debt collectors are constantly bugging you, a bankruptcy attorney can deal with them instead. Once you tell a debt collector that a lawyer represents you, the collector is supposed to communicate with the lawyer, not you.

Keep in mind that if you can’t afford to hire a bankruptcy lawyer, you may qualify for free legal services where you live. Contact your local or state bar association to find free legal services in your area.