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.
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 bankruptcy 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 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.
Filers whose income exceeds the median income in their state and who have at least a minimum amount of disposable income each month after paying their reasonable expenses might not be allowed to use Chapter 7. Instead, higher-income filers are 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 can afford Chapter 13 to use it.
When you talk to a bankruptcy attorney, the attorney should be able to tell you whether you can use Chapter 7. If you can choose between Chapter 7 and Chapter 13, the lawyer should explain the pros and cons of filing each chapter.
Ask the attorney how much you will have to pay, in total. The court charges filing fees (currently $338 to file a Chapter 7 case and $313 to file for Chapter 13 bankruptcy; $335 and $310 respectively until December 1, 2020). You'll pay additional costs, such as administrative fees to the trustee in your Chapter 13 plan. And of course, the attorney will charge you a fee to handle the case. The attorney will tell you what your fees will cover and how future services will be paid going forward.
You can anticipate a Chapter 7 case to be filed 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 than the agreed amount to start a Chapter 13 case and pay the remainder through the repayment plan.
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 attorney will describe the basic steps and how long the process will take.
An experienced bankruptcy attorney will have handled many cases in the local bankruptcy court and be familiar with the trustee and judge appointed to your case. Most bankruptcy lawyers can spot issues that could raise red flags and will have a sense of how things might play out in court. In fact, many will take steps to handle the situation before you appear at the 341 meeting of creditors--the one hearing all filers must attend.
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: