So, like a very large number of Americans today, you think bankruptcy is your best route out of the financial doldrums. After all the credit counselors, self-help books and Craigslist charlatans, it’s likely that you’ve grown tired of the debt cycle. We understand. That is what brings a lot of clients to our offices.
However, how do you go about filing bankruptcy? And furthermore, is an attorney really necessary? Well clearly, we believe our role in the process is essential to people getting the most benefit possible out of filing. But sure, that’s our job, and we do get paid for it. Nevertheless, it doesn’t mean we are not sincere in wanting to help. Truthfully, today’s Bankruptcy Code is a tough one to navigate alone. The financial industry—the people to whom, generally, you owe money—have gone to great lengths to plant the trail to financial freedom with booby traps of legal jargon and pitfalls of prickly requirements.
Is it legally mandated that you hire a bankruptcy attorney? Nope. Is it wise to have one at your side? Absolutely. Here’s why:
The Bankruptcy Abuse and Consumer Protection Act of 2005 changed the entire landscape of personal bankruptcy, instituting, among other things, the Means Test, a standardized way to determine if you have enough “means” to qualify for a Chapter 13 instead of a Chapter 7. The difference, on a general level, between the two being that in a 13 filing, you pay your creditors a set amount each month for five years until the debts are reasonably settled.
By lobbying for this section of the reform bill, companies who lend credit were able to get government backing for getting paid. It also gave them additional freedom to more aggressively market credit products because they knew that after the bill’s passage, more people would be legally obligated to keep paying them. Even though most credit card companies have potential losses to bankruptcy and default built into their business plans, the new law meant fewer people could “abuse” (in their eyes) the bankruptcy system by running by large bills and egregiously refusing to pay them.
As you can imagine, the Means Test carries with it a host of paperwork and processes. An experienced attorney can walk you through it, explaining what it all means and how it fits into the overall plan. And truthfully, the entire legal system—lawyers and judges—still have trouble figuring out aspects of the 2005 reform. It’s largely considered a poorly-written bill that was largely crafted by financial industry lobbyists and executives, not lawmakers.
Before 2005, it was “easier” to file on your own. But still not highly recommended.
There are, without question, bad lawyers out there. We know a lot of them. In many cases, a person would be better off going with a “free” street service than a bad attorney. Given our longevity in the industry, which can be easily proven and supported, we like to think we’re not like many of the “other guys.”
A good attorney is willing to listen first, as not all cases fit all firms. So ask for a few minutes on the phone and don’t feel pressured by a hard sell. Also, don’t let yourself get bounced around from one paralegal to another without progress. You will deal with them, sure, but after you have entered the process, if you begin to feel less important than when you originally called, maybe it’s time to move on.
We can name a number of reasons why using an attorney is the best way to experience a healthy bankruptcy. But in the end, that’s up to you to decide. Look at our Web site, ask around and make a few calls. We hope we can help. If you decide that you'd like to know whether bankruptcy is the right choice for you, please give us a call to set up your free initial consultation at +1-919-646-2654.