Should I Hire A Prep Service For My Bankruptcy
The next cheapest way to file bankruptcy would be to hire a bankruptcy petition preparers services. A non-attorney will gather all of your documents and prepare the bankruptcy petition for you.
For simple cases for individuals with limited assets or income, this is a good low cost alternative to hiring a bankruptcy attorney, but you wont have the confidence of knowing a qualified bankruptcy attorney has reviewed your case. The problem is that you might think you have a simple case and realize thats not the case when you run into issues with the trustee.
What Are The Normal Fees For A Bankruptcy Attorney
You can file pro se, but the success rate is not good. In the Los Angeles area, for example, nearly twice the number of pro se Chapter 7 cases were dismissed as attorney-represented cases in 2014 and attorneys filed nearly four times as many cases as self-represented parties. With an attorney, the success rate of a chapter 7 bankruptcy case is over 95%.
For Chapter 13, pro se filers do even worse than their Chapter 7 counterparts. The attorney-represented success rate for Chapter 13 in the Los Angeles area is over 55%, while the pro se success rate is only 0.04%, or 1 in 2,500. Less than half of all chapters filed pro se in 2014 received a discharge, while over 82 percent of attorney-represented cases were discharged.
Most people file pro se because either they think they dont need an attorney or they think cant afford an attorney. You probably know that attorney fees make up the majority of the cost of filing for bankruptcy. Youre already short on cash and you dont have much to spare for a lawyer. Youre looking for the best rate you can find. So, what can you expect to pay?
Bankruptcy Mill Tactics And Finding A Cheap Bankruptcy Attorney
One of the worst things about bankruptcy mills is that some of them will prey on vulnerable people. They know that if they can hook someone in, then they are more likely to get them to file and pay their fees. Some may even charge an upfront fee, which can be paid with a credit card.
The only problem is that this money is gone and there is no guarantee that they will file. Even if the cheap bankruptcy attorney or bankruptcy mill does, then there is still a good chance that your case could be dismissed because of mistakes or lack of knowledge about bankruptcy laws.
An experienced lawyer who has filed many cases should not charge you an upfront fee under any circumstances. These types of mills will be less likely to overcharge you or file a case that does not make sense for your situation. In fact, some of the more reputable bankruptcy lawyers will only charge you if they actually succeed in filing for bankruptcy on your behalf.
A cheap lawyer from a bankruptcy mill may also fail to include all of the required information and forms with your initial filing. Some of these filings can be quite large, and could take up a lot of space on your computer if you were to try to file them yourself. However, some attorneys will want to charge you extra for sending the information over electronically or by mail since they know that it is much more convenient in this day and age.
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Can You Pay A Bankruptcy Lawyer With A Credit Card
The answer is no. Bankruptcy lawyers can’t advise you to incur more debt shortly before a bankruptcy filing for anything other than necessary services, such as food, gas, and warm clothing. Charging unnecessary luxury items and services on a credit card or taking out cash advances shortly before bankruptcy can get you into trouble, even if you intend to pay the credit card charges. You’re still incurring debt when the bankruptcy attorney processes the payment.
So don’t expect your lawyer to agree to payment from you by credit card. However, attorneys can take credit cards from friends or relatives who are willing to pay the fee for you. The only requirement is that you disclose who paid for your legal services in your bankruptcy paperworkwhich is the case anytime someone pays on your behalf, regardless of how payment gets made. Learn more about what you should expect from your bankruptcy lawyer.
Average Chapter 13 Bankruptcy Attorney Fees
Under Chapter 13, youll work with the Trustee to create a payment plan for your debts. The plan will last for three to five years and at the end of it, your remaining unsecured debt is discharged. Unlike under Chapter 7, local bankruptcy law usually sets the presumptively reasonable attorney fees for Chapter 13 cases. If the attorney charges the presumptively reasonable fee, the Court wont look into the charges unless you specifically request it.
Presumptively reasonable fees vary based on the complexity of your case. Nationally, the average is around $3,000, but each bankruptcy district has its own standards and rules. In San Francisco, for example, the presumptively reasonable attorney fee is $3,500 for the basic case, plus anywhere from $500 to $1,500 extra for various issues that add complexity to the case. In the eastern district of North Carolina, its $3,700 plus extra fees for complications. In central Alabama, the presumptively reasonable fee is $2,750, and any extra fees will be examined by the court.
For Chapter 13 cases, attorneys generally charge a certain fee up front. Some attorneys will charge only the filing fee and others will want a larger down payment. Youll pay the rest of your attorney fee through the Chapter 13 plan. Youll make your regular plan payments to the Bankruptcy Trustee every month and the Trustee will pay the appropriate portion to your lawyer.
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Filing For Chapter 13 Bankruptcy
Filing for Chapter 13 bankruptcy allows debtors to pay all or a portion of their attorneys’ fees through their repayment plan, which can be great if you can’t pay all the attorney fees upfront. But this chapter doesn’t work for everyone. It’s primarily for debtors who can afford to pay back a certain amount of their credit card balances and other unsecured debt. Or for filers who need to catch up on mortgage arrears, back car loan payments, or tax debts. If you don’t have enough income to afford to pay into a Chapter 13 plan, you won’t qualify.
Further, some bankruptcy courts don’t allow Chapter 13 cases designed to pay only attorney fees through the planand the reasoning makes sense. You would have to pay the Chapter 13 bankruptcy trustee a percentage that you wouldn’t pay in Chapter 7 so financing fees via Chapter 13 are more costly than it might seem. Other courts don’t automatically prohibit fee-only Chapter 13 bankruptcies but consider any particular circumstances surrounding the case before deciding whether to allow it as in the best interests of the filer.
Call Us For Precise Fees Of Bankruptcy Attorneys In Your Area
We can look up the cheapest bankruptcy attorneys in your area using software so that you dont have to have multiple free bankruptcy consultations. We have to charge $9.99 for this option because we incur time costs and lookup costs, but we are happy to do this for you.
Call us at 833-272-3631 and let us know information about your city or use our contact us form. We can generally get you a result in as little as an hour during business hours. See the example below.
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How Soon After A Chapter 7 Can I Buy A House
After a chapter 7 bankruptcy, you can usually buy a house no more than two years after bankruptcy. In rare circumstances, some lenders will extend that to three years.
If you wait more than two years, the bankruptcy will be discharged. At that point, any debts that were discharged in the bankruptcy will be invalid, and lenders will again consider you a risky borrower.
In the rare event where the lender does not give a normal two-year restriction, its most likely because the lender is making the restriction up. No lender is going to decide, Im going to let you buy a home after 2 years, but Im going to charge you 30 percent interest.
There are two possibilities for why a lender might make a longer time restriction.
If a lender is bluffing, it doesnt really matter how long you have to wait before you can buy a home. The lender is bluffing because it has to, because if you or the seller makes any move, the lender will find out. Except, of course, that in the real world, nobody pays attention.
If a lenders mistake is letting you buy a home more than 2 years after bankruptcy, dont blame the lenders. Lenders dont know. They rely on credit reporting agencies to tell them whether or not someone has been bankrupt. If a mistake is made, they wont know.
So, if your house purchase has been delayed, find out whether the lender is bluff
What is the minimum amount of debt for Chapter 7?
Does This Attorney Have The Experience And Expertise To Handle The Problems That May Arise In My Case
Ask the attorney how many bankruptcy cases he or she has handled.
Attorneys Borders and Gerace have handled over 3000 bankruptcy cases. They also have successfully litigated cases before the bankruptcy court, the U.S. District Court for the Northern District of Ohio, the U.S. Court of Appeals, and had a case make its way to the U.S. Supreme Court.
Is the attorney personally handling the main portions of my case, or instead, delegating the work to secretaries or a paralegal? Of course, there is nothing wrong with an attorney using support staff to assist in the preparation of your case. However, you should guard against the situation where most of the preparation with you is done by a paralegal or you are shuffled from one attorney to another.
At Borders Legal Services you will meet with the same attorney from the first free consultation through the discharge of your case.
Does the attorney provide a retainer agreement or services contract outlining specifically what is covered for your fees and outlines the responsibilities of both you and the attorney? The retainer agreement is not required but should be given by an attorney. You should demand it so that there is no question about what you are paying for.
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Should I File By Myself
The cheapest way to file bankruptcy is to file it by your self, called a Pro Se filing. You can generally get the required forms at your local bankruptcy court and many courts offer free legal assistance to pro se filers. It is also possible to file a motion in court to request that the filing fee either be waived or paid in installments if you qualify. Unfortunately, the cheapest way to file bankruptcy isnt always the best way to file bankruptcy. Many pro se filers find themselves in a mess when faced with the intricacies of the bankruptcy code and its simply not a risk worth taking.
Be Careful If You File Chapter 7 Without An Attorney
If you decide to file bankruptcy without an attorney, you need to be cautious. When you file under Chapter 7, you may not be able to dismiss your case voluntarily. If the Chapter 7 trustee determines that your property may be sold to repay your debts, you might not be able to stop the process.
You may want to consider filing Chapter 13. Most bankruptcy attorneys include a majority of their attorneys fees in the Chapter 13 plan. You may also want to explore bankruptcy alternatives for debt relief.
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Cost Conscious Only At The End
Why is it that notions of economy only surface after a person has wracked up tens of thousands of dollars in debt?
Many of the debtors gave more thought to credit card expenditures or their credit score than they gave to picking a bankruptcy lawyer.
The influx of lawyers to this field and the prevalence of lawyer advertising suggest bankruptcy law is a commodity. Not so.
Yet lawyers with no track record to tout or past clients to spread the word compete on price. If you can buy a $15 toaster, why pay $30? goes the thinking.
Waived Bankruptcy Course Fee
Bankruptcy filers are required to take two courses on the subject before their debts are forgiven. A credit counseling course must be completed before filing Chapter 7, and a Debtor Education Course is required once you receive a case number.
The pre-bankruptcy pre-bankruptcy credit counseling course helps determine if bankruptcy is the right step. The debtor education course is a mandatory two-hour course focused on handling personal finances after bankruptcy.
Courses are taken through approved providers, with the cost dependent on which provider you choose. The combined cost of both courses may be as low as $30 and should never be higher than $50.
As in the filing fee, the cost of the courses can be waived if your income is so low that you feel you cannot afford the fee. The request for a waiver is made through the agency or entity that provides the courses.
Taking the courses is serious. If you dont complete the credit counseling course, your case could be dismissed. If you do not complete debtor education before the deadline, you will not receive a discharge and will owe the debts that brought you to bankruptcy. Take the course requirements seriously.
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How To Search For A Cheap Reputable Lawyer:
If you decide to file for bankruptcy on your own and need to find an affordable lawyer, follow the steps below:
You Get What You Pay For In A Bankruptcy Case
Filing for bankruptcy is complicated. To add to the confusion, bankruptcy reform legislation passed in 2005 made bankruptcy law significantly more complicated. The requirements for filing and document production are confusing and difficult to meet. A good bankruptcy lawyer knows the rules, the system, and the courts. Shell also be able to communicate effectively with the Bankruptcy Trustee you dont want to have to learn legalese on the fly.
Youve probably seen billboards and cheesy commercials advertising cheap Chapter 7 filings. Is it a good idea to use the cheapest bankruptcy attorney? Probably not. Youre right to be cost-conscious when youre already strapped for cash, but a cut-rate bankruptcy attorney is going to cost you in the long run. Lawyers that offer reduced-fee filing often hand your case down to a paralegal that handles the whole thing with little or no supervision. The low price comes with inexperience and poor attention to detail. Paralegals play an important role in legal work, but you want to have your case in the hands of an attorney.
If your case is dismissed , you wont get the full protection of bankruptcy when you file again later. Serial filers dont get the benefit of the automatic stay, so creditors can and will initiate foreclosure, repossession, and lawsuits leading to wage garnishment and bank levies.
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Dont Be Fooled Ask The Cheap Bankruptcy Attorney Questions
- Ask if it includes more than just filing your bankruptcy petition
- Ask if it covers the attorney talking with your creditors to inform them of your decision to file for bankruptcy
- Ask them if they will be there when you attend your meeting of creditors
- Ask them to show you the last 5 Chapter 7 bankruptcy cases to show if they billed the advertised price
- Ask the bankruptcy attorney if they will negotiation the reaffirmation agreement and be there for you.
If any of the answers to the above leave you with a less than desired outcome. Then you may want to shop elsewhere. These are clear signs that you are not getting an experienced bankruptcy attorney.
Bankruptcy mills are a type of cheap bankruptcy attorney that charge less than they should, and offer little support during your case. The person filing will prepare the paperwork and then file it with the court on your behalf. This is not necessarily a bad thing, as a good lawyer may charge extra to do it.
The difference is that the cheap bankruptcy attorney or bankruptcy mill will often cut corners on your case. They may not take all the steps they are supposed to in order to ensure you get out of debt as easily and painlessly as possible. For example, if you have assets they should be liquidated and used for your creditors. A cheep bankruptcy attorney or bankruptcy mill may skip this step, leaving assets that can be taken in order to pay them.
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