Top Secret #1: A bankruptcy lawyer may not be the best source for initial advice on whether or not to declare bankruptcy. Bankruptcy lawyers make their money by completing and filing bankruptcy petitions. Not by giving advice on how to avoid bankruptcy. So, before you seek advice from a bankruptcy lawyer, contact a not-for-profit credit counseling agency.
Top Secret #2: The new bankruptcy laws have served as the justification for outlandish fees for bankruptcy lawyers. While bankruptcy lawyers are now required to perform their duties somewhat more diligently and they are held more accountable under the new laws, the legislation which was passed and put into effect in 2005 does not justify some of the outlandish fees now being charged by some bankruptcy lawyers. Now more than ever, you should shop around for a bankruptcy lawyer before signing a retainer agreement.
Top Secret #3: Many bankruptcy lawyers downplay the effects bankruptcy will have on your future in order to get you to declare bankruptcy. Remember, it is in the bankruptcy lawyer’s best interest that you file for bankruptcy. Not all bankruptcy lawyers do this, but many do. Prior to meeting with a bankruptcy lawyer for an initial consultation, you should do research on the effects of bankruptcy on consumers. Some questions you should find answers to include: How long will this bankruptcy remain on my credit reports? How will this bankruptcy affect my spouse or soon-to-be spouse? Will this bankruptcy affect my chances to buy or lease a motor vehicle? To get a mortgage? To rent an apartment? Will I be able to keep any or all of my personal or real property? Sometimes it is in an individual’s best interest to file for bankruptcy. Many times (especially since the new bankruptcy laws went into effect), it is not.
Top Secret #4: Many lawyers do not know the new bankruptcy laws. Beware of any lawyer that handles “some” bankruptcy cases. Prior to the new bankruptcy legislation, bankruptcy was simply a matter of filling out a few forms. Filing for bankruptcy is now much more complicated, and you should find a lawyer whose practice is primarily, if not entirely, a bankruptcy practice. Many lawyers accept bankruptcy cases and figure they will learn as they go. Don’t let your bankruptcy case become a lawyer’s experiment. Because quite often a lawyer’s experiment can go horribly wrong.
Top Secret #5: If you enter into a payment plan, make sure you fully understand its terms. Many lawyers will perform no work at all on your case until the legal fee is entirely paid. That’s fine, so long as you are made aware of that fact ahead of time. Some bankruptcy lawyers agree to payment plans, lead their clients to believe their cases will move along in the meantime, and perform no work until the final check has cleared. If you enter into a payment plan with a bankruptcy lawyer, be certain to get all of the terms in writing.
I hope you enjoyed learning the top secrets of bankruptcy lawyers.
