If you’re about to file for personal bankruptcy, you do not need a personal bankruptcy lawyer to do the work for you, however, for your benefit, you should hire an attorney that specializes in bankruptcy. Why? Because that lawyer would know more about the laws on bankruptcy more than you do.
For one, he would find out if you should file Chapter 7 or Chapter 13. Chapter 7 means getting rid of all your debts (and your assets) while Chapter 13 means you pay the debt in a matter of three to five years. You on your own would not be able to make the best decision on which type of bankruptcy to file.
The good thing about bankruptcy lawyers is that they are not expensive to hire. Although the bankruptcy court as a whole does not set the fee on how much each lawyer is going to be paid, in the case of chapter 13, the courts that have jurisdiction impose a limit. The limits differ with each jurisdiction. However,it is between $2,500 to $6,000. In the case of chapter 7, the fees are lower from between $500 to $3,500.
If you’re like most people, you are probably wondering what you should look for in a bankruptcy attorney, or if any bankruptcy lawyer will do. Well, we are here to tell you that it depends on the number of assets that you have and your debt agreements with their creditors. In general, the more convoluted the case is, the more expensive it will be because you have to hire expert legal minds to tackle the job. But if yours is a simple case, you do not need to hire someone based on experience. In fact, you could hire a new lawyer or a solo practitioner.
So now that you know more about bankruptcy lawyers, you might be wondering if you need to pay them up front. In the case of Chapter 7 bankruptcy, you need to pay the lawyer before filing the case because, in chapter 7, all debts are liquidated, including the lawyers fees. In the case of chapter 13, most lawyers will work with you if you pay them a down payment. They will then receive the balance of their fee when your case is done.
While most lawyers charge fixed fees for each bankruptcy case regardless of how much work they do, some lawyers charge hourly fees on top of their flat fee for extra work, like replying to objections to a petition.
No matter what you do, make sure that you talk with at least three lawyers in consultation before you hire one. What you want to do is to determine the level of knowledge and experience of the attorney. If you have a lot of assets at stake or if your house is on the line, you should not skimp on due diligence. Contact your State Bar Association for a list of lawyers who can help you.