That's it, you're done. After struggling to pay your debts, you're ready to consider bankruptcy. It's time to contact a bankruptcy lawyer, but which one? Some advertise on TV and radio, others on billboards and bus stops. They seem fine, but you can't tell for sure. Asking friends for a recommendation is rather awkward. A discrete online search, maybe?
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Filing for bankruptcy is a serious step, requiring excellent advice and the right representation. Here's how to find, and then choose, the best bankruptcy attorney for you.
Signals of professionalism
To get started, check the National Association of Consumer Bankruptcy Attorneys, says Philadelphia lawyer Michael Duffy. Membership in this organization indicates that the firm or lawyer is "dedicated to the practice of bankruptcy, stays up to date on the latest developments, and provides competent representation."
Once you find members in your area, visit your state bar's website to find out if they're certified. "Most states have specialist certifications for bankruptcy," says NACBA President Edward Boltz. This certification means the lawyer has been practicing law for a minimum number of years, spends at least half his or her time working with bankruptcy cases, is peer reviewed and has passed a written examination in that specialty.
Such associations and credentials provide assurance that the lawyer has practical knowledge and will know what to do in case something goes wrong. "It's insurance," says Boltz. "A lot of cases are straightforward, but no one realizes how fast they can go south until they're going through it."
Prepare to meet with a few
After you've identified a few lawyers or firms you'd like to explore further, view their websites. They should contain clearly written educational information and downloadable financial forms that you can fill out that to help you determine if you qualify for bankruptcy.
Then, start to schedule some appointments. "Most lawyers will give a free consultation," says Boltz. "It's helpful to go to see more than one. Not to price shop, but to gauge how comfortable you are with them."
Before you meet, complete the forms available on the website (if they offer them) and bring them with you. Write down any questions you might have and bring them, too.
Qualities to look for in a bankruptcy lawyer
Personality and professionalism matter, and -- like anyone -- a lawyer who appears terrific on paper can fall short in person. It's critical that you trust that the person you hire will be working in your best interest. Look for the following three qualities during your consultation.
1. They discuss alternate resolutions. Chapter 7, a complete cancellation of eligible debts, might not be the best or only way to deal with your financial problems. If there are other options, an ethical lawyer will present them.
"With each case, I always weigh the options," says San Francisco bankruptcy lawyer Jeena Cho. "Sometimes I suggest that a client just pay his bills. This situation comes up if the client is making too much money or has too many assets. The other advice I give sometimes is to do nothing. This can happen for those who are 'collection proof,' meaning they have nothing the creditors can take in case of a judgment."
Another suggestion might be a credit counselor's formal debt management plan, especially if most of your lenders are credit card companies. The interest rate reduction the agency may be able to secure can translate into lower payments.
Chapter 13 bankruptcy, a court-supervised payment arrangement, might also be on the table. A lawyer may recommend it if you have enough income to support at least some of your liabilities and own property that could be taken in a Chapter 7 or a lawsuit.
Understanding the full menu of resolutions and then choosing from them reduces the possibility that you will regret making the decision to file for bankruptcy.
2. They display a passion for the process. You wouldn't have a heart operation performed by a indifferent surgeon, nor would you want the person representing you in bankruptcy court to be distant or aloof. Therefore, the lawyer you're considering should exude a genuine passion for the occupation and process. Find out why he or she chose to specialize in bankruptcy law. Listen carefully to the response. Many lawyers find the work fascinating and rewarding.
"I got into it over 30 years ago and I still love it," says Dallas lawyer Herman Lusky, "When people leave their debts behind, they can become active members of society again."
John Hargrave, a lawyer whose firm is located in Barrington, N.J., has a similar attitude. "By working with people I can make their lives dramatically better. There are few other areas, if any, where a lawyer can do so much good for someone in a short amount of time."
3. They hear and understand you. For most people, declaring bankruptcy is a painful decision. Because of the emotions involved, you'll want your attorney to not just to have the proper credentials, but to exhibit a desire to understand your specific situation and goals. Your lawyer should possess empathy and a willingness to take the time to ask probing (sometimes difficult) questions.
"Only hire someone who wants to know what led to your financial predicament," says Hargrove. "Someone who will can address what your biggest worries are."
Not all lawyers have great bedside (or courtside) manners, so after the meeting, ask yourself if you're truly comfortable with that person and if all of your concerns were addressed. If you feel like a number rather than an individual, cross that lawyer off your list and move on to the next until you find one who treats you with some respect.
A fee commensurate with service
And finally, the fee. Lawyers, even those who help you not pay your creditors, aren't free. The cost varies by complexity and location, but in general is between $800 and $2,500 from start to finish.
Avoid ultra-low-rate bankruptcy mills that advertise heavily and crank out the cases. "They usually only have a few lawyers and a large number of legal assistants," says Lusky. "For a simple run-of-the-mill case, they're probably OK , but you don't know when complications may arise. The first time you meet with your lawyer would be at the creditors meeting, and if there is a problem, they won't be prepared to handle it properly."
Don't presume you get more for hiring the most expensive lawyer on the block, however, or less if you scrape the bottom of the price barrel. "Fees are determined by the market," says Lusky. "In some areas, caps are set by the courts. This means that, for the same price, the client can usually get an experienced, highly qualified lawyer for the same price as a novice." Be sure to ask what it covers, though, as some attorneys include court and other costs in the quoted fee, others don't.
Once you've found the person who possesses the ideal combination of experience, character and cost, you're set. If you choose to move forward with filing, you can do so with assurance that you're working with a lawyer you can trust.