The bankruptcy process is one that might seem like an easy out if you're in a bad situation. Few bankruptcy lawyer services providers, though, would encourage a prospective client to jump right in. The courts apply a great deal of scrutiny, regardless of the kind of protection you're seeking from your creditors. It's wise to think about your situation the way professional would, so let's examine three key concerns an attorney will want to address.
Are You Actually Bankrupt?
One of the fastest ways to see a petition for relief tossed out is to file one when it's clear your current finances are sufficient to keep paying your debts down. A bankruptcy lawyer will want to see detailed documentation of both your present income and all outstanding debts. If there is evidence of some outside factor that isn't readily obvious, such as paying off a large and recent debt, that should also be included.
What Sort of Help Do You Need?
There are two basic types of bankruptcies. First, you can seek a complete discharge of your debts. Second, you can request a restructuring of your debts that allows you to keep paying.
When obtaining a total discharge of obligations, you should be aware of how aggressively the court will pursue payments for your creditors. Any non-essential assets you have will be converted into cash to make sure creditors are paid. If your family has three vehicles and two income earners, the court will likely sell the least practical of the three vehicles to satisfy outstanding debts. If you have a daily driver, an old pick-up truck, and a sports car, for example, the logical move for the court would be to liquidate the sports car.
Restructuring is a bit different. In particular, the court will want assurances that you can keep paying once things stabilize. It's still possible to seek a complete discharge if a restructuring plan fails to work out, but the court won't allow you to simply restructure if it's clear that will only delay the inevitable.
Paying for Counsel
A bankruptcy lawyer typically seeks payment of a portion of their fees upfront. For example, they might require a $1,500 retainer before anything is filed. Remaining fees will then be added to your repayment plan if you're planning to restructure your debts rather than discharge them. During a discharge case, the lawyer will want all fees upfront because outstanding fees could be discharged in the bankruptcy.
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