How to Find the Right Bankruptcy Lawyer

Written By
Julija A.
Updated
January 18,2022

In an era of economic uncertainty, bankruptcy filings are all too common, and there is no shortage of people offering their services to guide you through this complicated process. Of course, if you choose this route, being represented by a bankruptcy lawyer is strongly recommended. 

The trick is to find someone who is experienced in working with situations similar to yours and can offer clear and sound legal advice throughout the process. 

What Is a Bankruptcy Lawyer?

Bankruptcy lawyers can be split into commercial and consumer attorneys. The latter group helps individuals filing for personal bankruptcy, while the former handles liquidations for businesses.    

In addition to offering legal advice, assisting clients with court proceedings, and preparing legal paperwork, bankruptcy lawyers also protect individuals from creditors and help them clear debts. Commercial bankruptcy attorneys perform a lot of those same tasks for their business clients and can request time for the business to be restructured.    

Here is a standard list of duties that bankruptcy lawyers perform for clients:

  • Outline the bankruptcy filing process
  • Assess the client’s financial situation and determine whether bankruptcy is the right option 
  • Set up payment plans 
  • Help clients clear debts 
  • Deal with creditors
  • Paperwork preparation, including proof of income, assets, and expenses
  • Handling court proceedings and providing legal advice throughout the process

As you can see, a bankruptcy attorney has a long list of responsibilities that are designed to ensure that clients have the support they need throughout the entire filing process.

Do I Need a Bankruptcy Lawyer?

This is one of the questions that’s definitely been on your mind if you’re having cash flow problems or struggling to pay your bills. But before trying to answer this, it’s important to familiarize yourself with the different types of bankruptcies. 

There are five chapters of bankruptcy, but three of them are probably not relevant to your situation. Chapter 9 covers municipalities, chapter 12 deals with farmers, and chapter 13 relates only to individuals. 

On the other hand, chapter 7 bankruptcy covers both individuals and businesses and is the simplest form of liquidation. Chapter 11 offers businesses the option for reorganization while leaving the door open to liquidation. 

Corporations and partnerships filing for bankruptcy are legally required to have a lawyer. However, there are no such requirements for individuals. Nevertheless, bankruptcy is a complicated procedure, and if you want your rights protected, you’re better off going with a lawyer.    

The statistics are promising as only one in 25 consumers using an attorney is denied a discharge when filing for chapter 7 bankruptcy. On the other hand, one out of every three consumers filing their own bankruptcy doesn’t receive a discharge.

How to Find a Bankruptcy Attorney

If you’re thinking about filing for bankruptcy, then there are a number of ways to find bankruptcy attorneys.

  • Ask for a referral from people you trust. One way to find a suitable bankruptcy attorney is to speak with people you are close to and are familiar with your situation. Ask friends, family members, and even work colleagues about the most reputable bankruptcy attorneys they know. 
  • National Association of Consumer Bankruptcy Attorneys. The NACBA is a professional trade association of bankruptcy attorneys. They represent individuals going through the bankruptcy process. You’ll be able to find a local bankruptcy attorney and contact them directly.
  • Legal aid offices. This can be an option for low-income individuals. If you qualify, then you may be able to receive free representation from a good bankruptcy lawyer.
  • Online resources. You may be able to find a suitable bankruptcy attorney through online directories and resource lists. This includes local law firms with bankruptcy attorneys and online directories. However, keep in mind that lawyers that appear on online directories aren’t always endorsed, and you should always proceed with caution if there are no recorded testimonies or reviews to refer to.

Beware of Bankruptcy Mills

A bankruptcy mill is essentially a legal practice that files many bankruptcy cases without caring much about the outcome of each one. Instead, the goal is to accumulate as much money as possible from the various-sign up fees. They offer their clients little to no personal attention and don’t care about the circumstances that led to the decision to file for bankruptcy.

With extensive advertising on local television and radio stations, these bankruptcy mills tend to acquire many clients which makes them look like a legitimate law firm. However, given the relatively high chances of having your case dismissed and the prospects of your credit being damaged for 10 years, it’s important that you avoid bankruptcy mills.

If you’re unable to meet with your attorney or if they don’t seem to care about your case, this is a sign that you’re being drawn into a bankruptcy mill. Remember that when it comes to bankruptcy procedures, the devil’s in the details. That’s why direct, constant, and clear communication with your attorney is absolutely critical.  

What to Look for in a Bankruptcy Lawyer

Hiring a bankruptcy lawyer can be a daunting task. It’s important to choose someone that’s experienced in this area, but you should also be concerned about their geographic location. Finding a local bankruptcy attorney means that they’re more familiar with local bankruptcy laws. It also means that it’s easier to meet up with them to exchange documents and discuss your situation.

To simplify this process, here are some of the most important questions to ask when you first meet with your bankruptcy lawyer:

  • Are you going to be handling my case? As mentioned above, bankruptcy mills are a real concern, and there are a few red flags to look out for. One of the big ones is that you’re unlikely to meet with your attorney straight away. Instead, most of your communications will go through somebody else. If the person you’re speaking to isn’t going to be handling your case, then it usually isn’t a good sign. You want your initial contact to be with your actual attorney. There’s a lot at stake with a bankruptcy claim, so it’s important that they’re present for every meeting to get a better understanding of your situation.
  • Are you a bankruptcy specialist? Bankruptcy is a dense legal process. It’s complicated and can be hard to understand, even for a seasoned lawyer. So if the attorney you’re speaking to doesn’t actually specialize in bankruptcy, then you may want to avoid working with them and look for someone more qualified.
  • How many cases do you file each month? Most bankruptcy lawyers will file between two to five cases each month. Any more than that signals that you’re dealing with a bankruptcy mill. If they’re filing fewer than two cases, they probably lack the expertise you need.
  • What fees will I be paying? Every bankruptcy attorney has their own fee structure. It’s important to discuss how much you’ll be paying and how you’ll be paying it before you sign any contract or proceed further.

Conclusion

Filing for bankruptcy is a huge decision that you shouldn’t take lightly. Before you make up your mind, it’s worth meeting with a good bankruptcy lawyer who can help you figure out if your circumstances are appropriate for this course of action.

The best way to find the right person is to ask for a referral, contact the National Association of Consumer Bankruptcy Attorneys, or check out online directories.

FAQ

What should you not do before bankruptcy discharge?

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Before a bankruptcy discharge, you should absolutely not do anything that would drastically change your financial circumstances. For example, don’t use your funds in an unnecessary way and don’t try to liquidate your assets. You also shouldn’t try to file before receiving a valuable asset such as an inheritance.

What is the benefit of using an attorney in bankruptcy?

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Bankruptcy attorneys help clients in a number of areas, including:

  • Assessing their financial situation and determining whether bankruptcy is the right option 
  • Setting up payment plans 
  • Helping clear debts 
  • Dealing with creditors
  • Paperwork preparation 
  • Court proceedings 

Do you need a lawyer to file for bankruptcy or can you file on your own?

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Individual consumers can file for bankruptcy on their own, but the chances of you being successfully discharged are much higher when using a good bankruptcy lawyer.

About author

Albert Einstein is said to have identified compound interest as mankind’s greatest invention. That story’s probably apocryphal, but it conveys a deep truth about the power of fiscal policy to change the world along with our daily lives. Civilization became possible only when Sumerians of the Bronze Age invented money. Today, economic issues influence every aspect of daily life. My job at Fortunly is an opportunity to analyze government policies and banking practices, sharing the results of my research in articles that can help you make better, smarter decisions for yourself and your family.

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