We always conduct an initial consultation with prospective clients. This offers us the opportunity to determine whether an individual actually needs to file bankruptcy, and, if they do, what chapter they should file and if there would there be any issues in with their case. Time and again, I find myself asking my potential clients numerous questions, but I am rarely asked many questions. This amazes me. Filing for bankruptcy is a legal process, and I would imagine that someone not familiar with that process would have many questions. Maybe the problem is that people are unsure of what questions to ask.
Here are ten important questions that you should ask a bankruptcy attorney at your initial consultation (yes, just ten. Although, I am sure I could come up with a full 21):
1. What are your fees? Ok, please don’t take these to be in order of most important. I know this is always on a bankruptcy client’s mind. After all, you are considering filing bankruptcy because of a tough financial situation. However, I do not believe this should be your deciding factor in determining whether or not you file for bankruptcy. Most attorneys will offer reasonable fees and payment plans to assist you. As long as you are not under an emergency situation, such as a imminent foreclosure or garnishment, you can generally take time to pay your bankruptcy fees. Additionally, the statement, “you get what you pay for,” usually applies in the context of bankruptcy fees. Remember that this is a legal process. If you wouldn’t pay discount fees for your divorce or estate planning attorney, why would you pay that for your bankruptcy attorney? Often paying less means that you are not getting personal service or carefulness in the case.
2. How will this affect my credit, or what are the impacts of filing for bankruptcy? This is an important question because you want to weigh your debt management options. Bankruptcy will have an impact on your credit and your ability to obtain future loans. If you have debt that you may be able to manage in other ways with a lesser credit impact, bankruptcy may not be the decision for you. On the flip side, if your credit is already hit with late payments, judgments, etc…, the impact of a bankruptcy may not be as important.
3. How much work does the attorney do on my case? In an era of a bankruptcy boom, many law firms have decided to tackle a bankruptcy practice. Because an individual bankruptcy is more administrative (i.e. a lot of paperwork), some firms shuffle that work to paralegals. The attorneys may meet with a client initially and go with them to their Meeting of Creditors. The rest is done by a paralegal. While I know that attorneys get busy, you are paying hard-earned money for legal services, and you deserve to have an attorney handle your case. Also, your attorney will be representing you at court, and he/she should have a firm and first-hand understanding of your case.
4. Is there anything I shouldn’t do as I prepare for my case to be filed? I have had a few people ask me this question, and I really like it. It helps me remember that, as an attorney, not everyone knows the bankruptcy process like I do. So, some rules that are second nature to me are not necessarily known by my clients. Getting these out up front (such as no repayments of loans to family members) helps to prevent problems, or issue, in the future.
5. Can you explain both chapters of personal bankruptcy to me? If I know that someone has the income to qualify for a Chapter 7 bankruptcy, a lot of times that is where the focus of my explanation tends to go. However, there may be reasons why a potential client would want to file Chapter 13 bankruptcy. I will find this out and explain Chapter 13 as well. If you find that the attorney your speaking to is only talking about one chapter of bankruptcy, make sure you ask him/her to explain both. You have the right to choose either chapter, and you should know and understand what each entails.
6. When will my case be filed? If you are facing a garnishment or foreclosure, you need to know the timeline for having your case filed. Therefore, you should ask the attorney’s policy on at what balance he/she will start to prepare your bankruptcy petition and if fees must be paid in full to file the case. You also want to know the attorney’s typical turnaround time on getting a case filed once a fee is paid and all documents are provided.
7. What is the typical process of filing for bankruptcy from beginning to end? You need to have accurate expectations of what happens in a typical bankruptcy. For example, you should know how many times you will have to go to court, or what the role of the trustee is in a bankruptcy case. Also, you want to know when you should expect to receive your bankruptcy discharge. This is the time when your credit can start to rebuild.
8. How much legal experience do you have? Just like fees, this is one of those questions that is important, but maybe shouldn’t be given unequal weight. A better question might be, “how much bankruptcy experience do you have?” The reason is that bankruptcy is its own little world. It has its own code of laws and rules of procedure. A lot of attorneys who have had years of experience practicing in other areas of law find it hard to dabble in bankruptcy, or begin a bankruptcy practice. You want to find an attorney who has filed many successful bankruptcy cases and has experience with a wide variety of circumstances. This person should also be familiar with the current bankruptcy laws.
9. What can I do to help my credit once I file for bankruptcy? Everyone wants to get their credit back up almost immediately after filing. This is understandable, but you want to do it in the right way. Trying to apply for too much credit can actually hurt you more than it can help you. Ask the attorney the safe and best ways to rebuild credit post-bankruptcy, such as applying for a secured credit card.
10. I am joint on my car, house, bank account, credit card, etc.. with my parent, sister, child, etc.. Is that a problem? It is typical to go over assets in a bankruptcy consultation because there is the possibility that some assets might be liquidated by the bankruptcy trustee. I always find that people forget those assets that are not entirely theirs, like the joint bank account, or vehicle. However, this is so important to mention because it can have an impact on your case and your family member or friend. So, if you know you have this situation, remember to ask the attorney if this would be an issue in your case and how you might be able to plan for any complications.
As I said, this is just a starting point. There are many other questions that could, and should be asked, during an initial consultation. However, I think these ten are a good start and will get the conversation flowing.