Tips for Hiring a Chapter 13 Bankruptcy Lawyer

Hiring a Chapter 13 bankruptcy attorney used to be a relatively simple process. Today, it can be difficult to find an attorney to represent your case; particularly if you reside in a small town. Additionally, the cost of filing for bankruptcy has increased substantially due to the Bankruptcy Abuse Prevention and Consumer Protection Act.

The BAPCPA includes a provision that requires each Chapter 13 bankruptcy attorney to file a notarized statement verifying that their client’s petition is necessary. This places an additional layer or risk on the attorney if clients are not honest in providing financial details.

The new bankruptcy laws require attorneys to conduct additional investigations to ensure that clients have provided accurate and proper information. Additional casework and higher risk factors are the main factor in increasing legal fees, which in turn makes it more difficult for US citizens to obtain a suitable attorney.

While businesses and corporations are legally required to have legal representation, individuals have the option of filing for bankruptcy on their own. Few people have the knowledge or skills to go through the process on their own. It is important to understand that bankruptcy has far-reaching financial and legal consequences and it is strongly recommended that you obtain the appropriate counsel.

Multiple steps are involved in the bankruptcy process. Debtors must file a petition with the court, notify creditors, attend a 341 meeting of creditors, obtain credit counseling through an approved US trust agency; and submit financial and legal documents in a timely manner.

Financial experts recommend consulting with a minimum of three bankruptcy attorneys before making a final decision. It is important to work with an attorney who has a thorough understanding of the BAPCPA requirements. An improper form or a missed deadline may result in the termination of the bankruptcy petition.

People whose income is at or below the poverty level can obtain free legal advice through pro bono services. The American Bar Association provides a list of Chapter 13 bankruptcy pro bono attorneys through its website at abanet.org.

Take the time to organize financial records before meeting with prospective attorneys. Make a list of questions and write down the answers during the consultation. When contacting law firms to schedule meetings, ask what information the attorney requires. Most attorneys request an itemized list of income and expenses, payroll records, current and prior year tax returns, and contact information for creditors.

Chapter 13 bankruptcy requires debtors to obtain credit counseling through an approved agency of the US Trustee. Debtors must file a payment plan through the court and make monthly payments to the bankruptcy Trustee.

Chapter 13 payments typically span three to five years. During this phase, debtors are prohibited from acquiring new debts without judicial authorization. If debtors miss a scheduled payment, creditors can petition the court for dismissal.

An unfortunate truth is that approximately 75 percent of people file for bankruptcy within the first year. When this occurs, debtors lose judicial protection and creditors can continue with collection actions.

While bankruptcy can provide financial relief, it can also cause more hardship. It is important to consider alternatives such as debt consolidation, debt settlement, credit counseling, and budgeting, which may have less of an impact on credit scores while still providing the same results.