A bankruptcy attorney charges between $1000 and $3500 for Chapter 7. A Chapter 13 bankruptcy plan lasts for several years (typically between 3 years and five years). This usually results in a higher attorney fee for Chapter 13 when compared to that of Chapter 7. An attorney charges between $2500 and $6000.
While debtors can save a significant amount by filing bankruptcy on their own, there is no doubt that hiring an attorney for navigating the complex legal process is essential. A bankruptcy attorney helps you handle creditors, debt collectors, bankruptcy trustees, judges, and the overall process like a pro. He or she enables you to take the best course of action when discharging your debts through bankruptcy.
8 Reasons to hire a bankruptcy attorney
Here are the eight reasons to hire a bankruptcy attorney when you are interested in the liquidation process or a reorganization plan.
Help you select the right type of bankruptcy.
Do you want to file Chapter 7 bankruptcy or Chapter 13? Well, it’s not necessarily up to you. You can file Chapter 7 bankruptcy only if you meet the eligibility criteria. Otherwise, you have to file Chapter 13 bankruptcy.
The bankruptcy attorney will analyze your financial situation, the debt amount, monthly income, and state median income to determine if you qualify for Chapter 7 or 13 bankruptcy.
Help you apply for the means test the right way.
The means test decides whether you will qualify for Chapter 7 or 13 bankruptcy. An attorney can help you understand the tricks to pass the means test. For instance, an attorney may suggest you buy a health insurance policy for your family. You can deduct the premium amount and lower your overall income. That may help you qualify for Chapter 7 bankruptcy.
Help you complete the bankruptcy paperwork.
There are a series of bankruptcy forms you have to fill out regarding your financial transactions, debts, expenses, assets, income, etc. A bankruptcy attorney knows what you should disclose, how to determine the value of your assets, how to calculate your income, the necessary and reasonable expenses, etc. He or she can help you fill out and submit the right forms at various stages of the bankruptcy filing.
Help you dodge questions in the 341 meetings.
An attorney can help you handle tricky questions in the 341 meetings and give you an idea of what questions a trustee may ask you. The attorney will explain the answers beforehand so that you can handle the meeting with confidence.
Help you determine the proper valuation of your assets.
What is the value of your car? What is the fair market value of your assets? An attorney can help to determine the value of your assets and disclose it to the court. Remember, you have to admit everything under the penalty of perjury.
Help you explore and take advantage of the exemption laws.
Federal and state exemption laws help to protect your assets in bankruptcy. A bankruptcy attorney knows how to take advantage of those laws and protect your valuable assets.
Help you negotiate a reaffirmation agreement.
Do you want to protect your house or car? Well, in Chapter 7 bankruptcy, you can save your home or car through the reaffirmation agreement or redemption. Your bankruptcy attorney will negotiate with your creditors on your behalf and draft the reaffirmation agreement.
In a Chapter 13 bankruptcy, your attorney will discuss with your creditors a payment plan, interest rates, value of properties, etc. He or she will draft the best repayment plan for you.
Protect you when there is an automatic stay violation.
Some debt collectors don’t know when to stop making collection calls. Even after you have notified them of your bankruptcy filing, they may still attempt to call you for payment. This is an automatic stay violation.
Once you file bankruptcy, an injunctive order stops any collection activity. If a creditor or a debt collector violates this law, your bankruptcy attorney can file a motion in the court to hold the creditor in contempt.
An attorney can give you the best legal advice on how to navigate the bankruptcy process. He or she will help you understand the role of the bankruptcy trustee and judge. Your attorney will guide you through each step of the bankruptcy process to help you avoid making costly mistakes. Most importantly, you will have the peace of mind that has been missing in your life.
How to find an affordable bankruptcy attorney
To find an affordable attorney, explore an online bankruptcy marketplace. You can find local bankruptcy attorneys that fit your budget within a few clicks. All you have to do is submit your case details, budget, and city name to start exploring vetted attorneys without leaving your couch.
Is bankruptcy the only way to solve your debt problems? Maybe not.
When your financial problem is pretty simple, a debt settlement or a consolidation plan may resolve it quickly. You don’t need to file bankruptcy and navigate the complex legal process for that. A bankruptcy attorney can help you explore alternative solutions and choose the one that is right for you.
Author Bio: Lyle Solomon has considerable litigation experience as well as substantial hands-on knowledge and expertise in legal analysis and writing. Since 2003, he has been a member of the State Bar of California. In 1998, he graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, and now serves as a principal attorney for the Oak View Law Group in Rocklin, California.