An excellent way to start a meeting with a bankruptcy attorney is by explaining why you're there. It might be that you're facing foreclosure, repossession, wage garnishment, or a creditor lawsuit—or it could be that you can't continue juggling the bills. Once that's out of the way, you'll be ready to ask the critical question, "Will bankruptcy solve my problem?"
If the answer is yes, you'll want to ask follow-up questions, such as:
If all goes well, you should experience a sense of relief at the end of the meeting and feel confident in the bankruptcy lawyer's plan. If not, you'll probably want to consult with another bankruptcy attorney.
It's okay to have more than five questions, but be sure to cover these basics.
The lawyer will explain that you'll be able to "discharge" or eliminate credit card balances, medical and utility bills, personal loans, back rent, and more in bankruptcy. You can get rid of your mortgage and car payment too, but because you guaranteed these "secured" debts with the property you bought, you'll need to return the home or vehicle to the lender if you don't pay as agreed.
Other debts you can't discharge in bankruptcy include domestic support payments, student loans (in most situations), and recently incurred tax debt. Expect your attorney to ask if you have any nondischargeable obligations. You can prepare by reviewing a list of debts you can't discharge in bankruptcy here.
Bankruptcy lawyers also want to know if you have property you don't want to lose in bankruptcy. Common examples include homes, cars, boats, sporting equipment, and valuable family heirlooms. That's not to say that all assets are protected in bankruptcy—they're not. But a bankruptcy lawyer will be familiar with your state's bankruptcy exemption laws and can explain the things that all filers can protect, such as some equity in a home, a modest car, furnishings, clothing, and a retirement account. Keep reading to learn what happens to nonexempt property.
You'd think this would be the first question you should ask, but in reality, a bankruptcy lawyer can't answer this question without discussing your property and debt type first—and you'll still need to explain how much you make. Here's why.
You can learn more about qualifying for bankruptcy by reading about the means test. If you pass, you'll be eligible for Chapter 7. Otherwise, consider filing for Chapter 13.
A bankruptcy lawyer will explain how the bankruptcy process works. For instance, you'll need to provide detailed financial information before the bankruptcy lawyer can prepare your paperwork, and you'll need to review and sign the completed bankruptcy forms, so your availability and cooperation will also be a factor.
The Chapter 13 process is similar, but the court must first approve your proposed repayment plan at a confirmation hearing. Then you'll need to complete the three- to five-year repayment plan. Your bankruptcy case will end shortly after that.
The attorney will explain the total amount you'll have to pay. The court filing fees are currently $338 for a Chapter 7 case and $313 for Chapter 13 bankruptcy. You'll pay additional costs, such as the Chapter 13 payment and administrative fees through your Chapter 13 plan. And, of course, the attorney will charge a fee to handle the case. Be sure to ask what your payment will cover.
You can anticipate that the lawyer will file your Chapter 7 case shortly after you pay the entire retainer amount. Chapter 7 lawyers require full payment to avoid having the balance owed discharged, making it uncollectable. By contrast, most filers pay less to start a Chapter 13 case and pay the remaining amount owed to the attorney through the repayment plan.
Bankruptcy is an unusual area of law because it's essentially a qualification process. The laws provide instructions for completing a 50- to 60-page bankruptcy petition, and because all rules apply in every case, you can't skip a step.
The forms and resources below will help you find more information. Also, you can use this list of Chapter 7 and 13 bankruptcy forms to see where this topic falls. And this handy bankruptcy document checklist will help you gather the things you'll need to complete the petition.
More Bankruptcy Information
You'll find fillable, downloadable bankruptcy forms on the U.S. Courts bankruptcy form webpage.
We want to help you find the answers you need. Go to TheBankruptcySite for more easy-to-understand bankruptcy articles, or consider buying a self-help book like The New Bankruptcy by Attorney Cara O'Neill.
We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by consulting with a local bankruptcy lawyer.