All That You Need to Know About Choosing a Bankruptcy Lawyer

According to figures issued by the http://www.uscourts.gov, a whopping 91% of Americans filing a chapter 7 petition for bankruptcy will hire an attorney to assist them. Despite being an expensive proposal, the high demand for legal representation is due to the fact that common people do not understand how the system works and what process to follow for maximum protection from creditors. However, you could easily spend a packet and still not get the desired results if you do not know how to choose a bankruptcy lawyer. Some useful tips:

Is It Really Necessary to Engage A Lawyer?

Technically, it is not mandatory for people wanting to file a bankruptcy petition to hire a lawyer. If you want to go ahead without legal representation, the legal term for the filing is pro se or pro per. Even though there are wide variances in the number of pro se filings, the national average for America is 9%. Typically, pro se filings are done either by people who can’t afford to hire a lawyer or have very simple finances with no secured debt and good knowledge about bankruptcy filing processes. Since most people are in really desperate circumstances and want to take the full cover of the bankruptcy act, they prefer to take the help of lawyers despite the expense.

Types of Bankruptcy Lawyers Available

Essentially, there are two types of lawyers; those who work with individuals filing petitions under Chapter 7 and Chapter 13 and those who specialize in business bankruptcies, under Chapter 7 and Chapter 11. Even though both types of lawyers are qualified to deal with both types of bankruptcies, you should preferably pick a lawyer according to your needs.

The sort of firm in which, the consumer bankruptcy lawyer works can also mean a difference in the extent of attention you receive. A majority of consumer bankruptcy lawyers have individual practices or practice along with few others with the help of paralegals and clerical assistants. Other attorneys engage a few lawyers to supervise an army of clerical and paralegal workers who do the bulk of the work. These are typically known as bankruptcy mills and it is quite possible that you may only be able to meet the attorney representing you at the first meeting with your creditors that may happen a month after the case is filed with the court. Typically, you will discover that the roles of various individuals working in a bankruptcy mill to be quite specialized and restricted. While the system may be very efficient, dealing with a series of people in the same firm can leave you with a feeling that you are just a file not an individual with feelings and sentiment.

How Expensive Is Filing for Bankruptcy?

There is no big difference in the fees between solo firms and mills; the fees tend to be competitive and are generally governed by the market forces. The fees are also monitored and reviewed periodically by the US Trustee’s Office. Filing a bankruptcy case involves three types of distinct costs. The official court filing fee for Chapter 7 is $335, and for Chapter 13, it is $310. You are also expected to attend a pre-filing counseling session as well as a financial management course post-filing that are provided by independent organizations that typically charge fees of around $25-50.

Unlike the typical cost structure of the national debt relief program, the biggest cost component is the attorney’s fee that varies across the country as well as depends on the complications involved in each case and the experience of the attorney. According to the American Bankruptcy Institute, the national average Chapter 7 attorney fee is $1072 while that for Chapter 13 is $2,564; however, there are huge differences depending on the location and the forces of supply and demand. You should ask your lawyer for an estimate of the likely costs and treat it as a conservative figure.

What About the Free Services One Hears About?

You may qualify for free legal services if your total family income is less than 125% of the federal poverty guidelines. These services are available through Legal Services Corporation or Legal Aid, both non-profits that provide legal services to the impoverished. Even though their eligibility criteria are very strict, it is worth a look if you are unemployed, on public assistance or are disabled. You can also avail of free legal services through the pro bono attorney projects that many large legal firms or bar associations typically have for assisting people with legal services at no or very little cost. The eligibility criteria of these programs vary as does the availability of members to render the services.

Locating a Bankruptcy Lawyer

As may be evident from the high-decibel advertising on TV and billboards, there is hardly a shortage of bankruptcy lawyers willing to provide services. However, since you need to identify one who is trustworthy and reliable besides having the required expertise while being affordable, the task is not exactly very easy. Among the best ways is through personal referrals by people you trust; family and friends, coworkers, neighbors, etc. It may be uncomfortable to discuss your need with other people, however, if they have had similar experiences, their suggestions would be very valuable indeed.

Internet searches are also a very good way of identifying local resources that you can use. You can also verify their credibility and reputation by reading online reviews before deciding to make an inquiry. Visiting the website of the National Association of Consumer Bankruptcy Attorneys (NACBA) can be useful in finding a lawyer who is networked well and an active and responsible member of the legal community. Another good resource is the website of the National Association of Consumer Advocates. Referring to one of the plentiful online legal referral services can also be useful as is your local bar association.

Conclusion

If though you may be broke, it is generally worth the trouble and the expense of hiring an experienced and reliable bankruptcy attorney. Your bankruptcy filing has a greater chance of success because then you can avoid all the mistakes that can trip you up and leave you exposed to creditor action.