If you are planning to hire a lawyer to help you with your bankruptcy case, you should shop around. Ask each attorney some basic questions; the answers will tell you a lot about the attorney's style and strategy.
Questions to Ask the Attorney
- Which type of bankruptcy should I file, Chapter 7 or Chapter 13?
These are the two basic types of bankruptcies for individual filers. In Chapter 7, you must allow the trustee to take any property you own that isn't exempt under the state or federal exemption list available to you. (Typical exemptions include some or all of the equity in your home, a car, your clothing, household furnishings, and the tools of your trade; to find out more about exemptions and look at the exemption list in your state, see Bankruptcy Exemptions - What Do I Keep When I File for Bankruptcy?) In exchange, your debts will be discharged (wiped out), except for some types of debt that can't be discharged in bankruptcy, such as back taxes, child support, and student loans (in most situations).
In Chapter 13, you don't have to give up any of your property. However, you must enter into a three- to five-year repayment plan to pay back some or all of your debts.
Under the 2005 changes to the bankruptcy law, filers whose income exceeds the median income in their state and have at least a minimum amount of disposable income each month after paying their reasonable expenses might not be allowed to use Chapter 7. Congress felt that higher-income filers should be required to repay some of their debts in Chapter 13 rather than having them discharged immediately in Chapter 7. This requirement -- called the means test -- is intended to force filers who could afford Chapter 13 to use it, if they want to file for bankruptcy.
When you talk to a bankruptcy attorney, the attorney should be able to clearly explain the differences between Chapter 7 and Chapter 13, to tell you (after evaluating your financial situation) whether you will be allowed to use Chapter 7, and, if you will have a choice between Chapter 7 and Chapter 13, to tell you which would be best in your situation (and why).
- What fees will I have to pay?
Ask the attorney how much you will have to pay, in total. The court charges filing fees (currently $299 to file a Chapter 7 case and $274 to file for Chapter 13 bankruptcy). There may be additional costs, such as administrative fees you have to pay the trustee in your Chapter 13 plan. And of course, the attorney will charge you a fee to handle the case. If there are unexpected complications, the attorney may need to spend more time (for which you will have to pay more money); the attorney should let you know what types of situations may lead to a higher fee and whether these are likely in your case.
- When will my case be filed -- and when will it be over?
The attorney should be able to let you know, based on how busy the attorney is and how the local court process works, when your case will be filed. Of course, the attorney must depend on you to provide detailed financial information and review the bankruptcy forms before they are filed, so your availability may also be a factor. The attorney should be able to describe the basic steps in the process and about how long they will take.
- Are there any problems I should anticipate?
An experienced bankruptcy attorney has probably handled hundreds of cases (if not more) in the local bankruptcy court. The attorney will probably have some experience with the trustee and judge appointed to your case, how particular creditors are likely to respond to your bankruptcy filing, and so on. If your situation raises any red flags -- for example, that your income may be too high for Chapter 7, or that you may have made some questionable financial transactions before filing for bankruptcy (like running up bills you knew you'd have trouble paying or giving valuable property to a family member) -- the attorney should have some sense of how things might play out in court.
Questions to Ask Yourself
Once you've spoken to an attorney about your case, think about the experience. Consider these questions as you evaluate whether to hire the attorney:
- Did you understand the attorney? Did the attorney explain things clearly, in language you could follow?
- Did the attorney's strategy make sense to you?
- Did the attorney listen to you carefully and respond thoughtfully to your questions?
- Did you like the attorney? You don't have to become best friends, but you should feel that the attorney is on your side and will actively protect your interests. If the attorney was condescending, rude, or distracted, it's probably best to keep looking.