Editor’s Note: Changes made on November 29, 2017
Nearly 800,000 Americans filed for bankruptcy in 2016.1 If you are facing financial difficulties, the important thing is to realize you are not alone. Professionals like bankruptcy attorneys can give you a clearer understanding of where you stand and what your options are. Taking control of the situation is often the first step to financial recovery.
Source: Federal Reserve Bank of New York
In this article, we will discuss the process of hiring a bankruptcy attorney. It isn’t overly complicated, but this guide will provide you with all the resources necessary to make an informed decision.
Make a List of Bankruptcy Attorneys in Your Area
Facing bankruptcy is overwhelming and stressful. Taking that first step is hard but also key to a long term solution. Psychologists recognize the anxiety that associates with “the first step” and suggests breaking it down into as many manageable pieces as possible.2 Our advice is to start by simply making a list of bankruptcy attorneys. You can search the web for “bankruptcy lawyers in my town,” look in a phone book, or ask your friends and family for names. See our listings below:
Your list doesn’t have to be very long. You may come across more attorneys later on. A handful to a dozen names is all it takes for now. This gets the ball rolling by giving you options and the confidence to take the next steps.
Narrow Down that List by Doing Your Research
Now that you’re armed with a list of potential attorneys, you are ready to refine it. You wouldn’t try a new restaurant without checking it on Yelp. Why shouldn’t you do the same when hiring a lawyer?
There are a myriad of websites out there to help you find attorneys and we’ve compiled a list to help you navigate through them and to understand what to look for.
a. Make Sure the Attorneys are Licensed
The easiest way to start narrowing down your list of attorneys is to make sure they are well qualified to practice law. The legal industry is a highly regulated field due to the nature of the work. Only those who have gone through the necessary training and education can call themselves a licensed attorney.
First and foremost is to make sure the attorneys are licensed. Just because Uncle Benny gave you the name of his old college buddy who went to law school, doesn’t mean that he is licensed to practice law and give legal advice. Attorneys must pay annual dues and keep up with their continuing legal education to remain licensed. Also, certain serious infractions can result in an attorney’s suspension or even disbarment.
FightFraudAmerica.com is an excellent resource for checking the legal standing of an attorney. Under its “Attorney License Verification” section, it links you to the State Bar of each of the fifty states. You can then search via first and last name. The results indicate whether the potential attorney has an active license and whether or not there have been any disciplinary actions in the past.
b. Make Sure They are Experienced in Bankruptcy Law
Much like medicine, the legal industry is occupied by general practitioners and specialists. But the distinctions are less clear. A criminal prosecutor most likely won’t handle your civil case. Likewise, a personal injury attorney may not be experienced in the intricacies of bankruptcy law.
Make sure the attorneys on your list actually practice bankruptcy law. The easiest way to check is to visit his or her firm’s webpage. There, they will almost always list their practice areas, educational background, bar admissions, and relevant experience. Alternatively, you can search their names on LinkedIn for a profile.
c. Look for Client Ratings and Peer Recognition
The opinion of clients and colleagues is a great way of evaluating a prospective attorney. Here are some of the best online resources for client and peer reviews.
Take Advantage of an Initial Consultation
Once you’ve narrowed down your list, it is important to meet the attorneys before committing to one. Financial matters can be very personal and it is important to be comfortable with who you are working with.
Take advantage of their free initial consultations. These are usually 30 minutes long. This will give you and the attorney a chance to meet face-to-face and have a better understanding of the situation.
1. Setting up an Appointment
The fastest way to set up a consultation would be by phone. Alternatively, a firm’s website may have a “Contact Us” form that you can fill out for them to get back to you later. Either way, ask the firm what specific documents they would like you to bring along.
If you are more comfortable speaking in another language, also ask if they can provide you with an interpreter during the consultation. Legal terms and concepts are difficult to understand to say the least and communication between attorney and client is of utmost importance.
2. Prepare for the Initial Consultation
Being prepared will help you take advantage of this initial consultation. Here is a list of things to consider before a consultation:
- Organize your documents. Having everything well organized and clearly labeled will save you from rummaging through a stack of papers nervously at their office.
- Prepare a short list of questions to ask the attorney. See the section below for more detail.
- Be mentally prepared to answer questions fully and candidly. Omitting facts or lying to your attorney may harm your case in ways you cannot imagine. Don’t risk it.
- Be prepared to discuss costs. One of the primary goals of this consultation is to know how much the attorney’s fees will cost.
- Bring a pen and a notepad. Leave your tablet and laptop at home. Bring paper and writing utensils to record what you’ve learned.
3. Ask the Right Questions
Remember that the consultation is for you to decide whether or not to hire the attorney. The following is a list of questions you may want to ask during the meeting. Remember to write down the answers.
- Will you be handling my case directly?
- Are most of your bankruptcy clients individuals or businesses?
- What is your experience with bankruptcy cases similar to mine?
- Is there anyone else in your firm who handle bankruptcy cases and will they be involved?
- Should I even be filing for bankruptcy?
- What are my alternatives to filing for bankruptcy?
- Are there any red flags in my case?
- How long will the process take?
- What are some of the most important deadlines?
- What is your overall game plan for my case?
- What is the best way to reach you?
- Who will accompany me to court?
- How will you keep me updated on the progress?
- How do you calculate your fees and what do they include?
- Is there a retainer and is it refundable?
- Are your fees negotiable?
- Do you offer payment plans?
The following links provide quality additional information:
4. Write Down What You’ve Learned
Recap what you have learned after the consultation. A lot of information will have come your way in a short period of time, so take the time afterward to process it. Write down what you’ve learned and use the notes to refresh your memory later on.
Make an Informed Final Choice
After you’ve met with a few attorneys, it’s time to make a choice. We’ve listed three factors for you to consider below.
a. How well did the attorney communicate with you?
An attorney is your legal representative so it is crucial that both parties understand each other’s priorities. Did the attorney listen to you carefully and give you the proper attention? Did the attorney explain things clearly in a language you can follow? Was he or she courteous and polite or was he rude and unresponsive? These questions dictate how service oriented the attorney is towards his or her clients.
b. Do you trust that the attorney can achieve your goals?
Hiring a stranger, in any situation, involves a leap of faith. But having done your research online and having met with the attorney, you should have some sense of whether or not the attorney knows what he or she is doing. Does he or she have experience in bankruptcy law? Is he or she detailed oriented or clumsy? Did he or she graduate from Harvard or from an unaccredited college? Don’t be distracted by a sharply pressed suit and a firm handshake. Decide objectively.
c. Are you comfortable with the attorney’s fees?
As of April 2015, Chapter 7 bankruptcies have a federal filing fee of $335 and average attorneys fees from $1,200 to $2,500. Chapter 13 bankruptcies have a federal filing fee of $310 and average attorneys fees from $2,000 to $3,000. These ranges should include everything required to complete your case, provided that there aren’t any rare or unforeseen circumstances requiring extra attention and time.
You have the right to have the fees laid out in advance in a written contract. The contract should break down what the attorney’s fee includes.
Top rated lawyers may charge a premium, but they might have junior attorneys work on your case. Conversely, more affordable attorneys may have a higher volume of active cases so they may not have as much time to focus on yours. Cost is a bottom line determination but one that shouldn’t be your only determining factor.
Work as a Team with Your New Attorney
After you’ve hired your new attorney, you’ve now got an expert on your side, a new recruit to your team, a professional in your corner. Your attorney is a valuable resource so working together efficiently will not only save time and money, but it may improve your chances of a favorable outcome. Here are 5 useful tips on working with your lawyer:
1. Keep your lawyer informed and up to date. Attorneys can only work with what is available to them. Provide your attorney with full disclosure and give your attorney all the necessary documents and materials. Promptly update your attorney on changes in deadlines, court dates, or other circumstances.
2. Be available and easy to reach. Your attorney should be responsive to your questions and requests, but the same should apply to the client. Sometimes, attorneys need specific authorization from the client to carry out an action and your delay in responding to his email or voicemail can become costly.
3. Be reasonable about what your attorney can and cannot do. Attorneys must work within the boundary of the law and the ethical rules.9 Also, realize that unless you’ve paid a lot of money to hire your attorney exclusively, he or she will have other clients and demands.
4. Ask for copies and keep your own records. Keep copies of all papers you receive from anyone involved in your case. These include court documents, letters from your attorney, documents from creditors, and etc. This is a level of protection for yourself in case your relationship with the attorney goes wrong.
5. Ask for clarifications and follow their instructions. While attorneys are known for their legal jargon, most really try to be clear. Always ask for clarification if there is something you don’t understand and if given instructions, make sure you follow them accurately and with detail. You are paying for their advice.
Hiring any professional is inherently risky but education is the kryptonite to a bad decision. Hopefully, this guide has provided you with a clear framework to mean the difference between a quality service experience and a regrettable one.
Recall that it is possible to file for bankruptcy on your own. But recent studies have shown that your chances of discharging a debt is much higher with the help of an attorney. Over 95% of attorney-represented Chapter 7 filings resulted in a successful debt discharge, whereas self-filings only had a 61% success rate. The numbers are even more dramatic for Chapter 13 filings where self-filings only had a 1% success rate versus 55% with attorney representation.7
If ever you are facing the stress of bankruptcy, understand that you are not alone and financial difficulties can be overcome. Professionals like bankruptcy lawyers can help you take control of your situation and help you on your way to financial recovery.
The materials provided in this article are for informational purposes only and not for the purpose of providing legal advice. Use of and access to this article or any of the links contained in the article do not create an attorney-client relationship between the author and the user or browser. You should contact your attorney to obtain advice with respect to any particular issue or problem.