Here’s a truth bomb: Not all Chapter 7 lawyers are the same. Some know the ins and outs of bankruptcy law and can cater to unique financial situations, while others impose a one-size-fits-all approach, making the bankruptcy process more difficult than it has to be.
This is why it’s important to thoroughly analyze your Chapter 7 lawyer’s expertise and see if they can serve your needs. Here are four questions you must ask:
1.What is Your Experience with Bankruptcy Cases?
First things first, ask about the lawyer’s experience with bankruptcy cases. A lawyer could have practiced for 40 years, but only handled a handful of Chapter 7 cases. So, make sure to ask how long they’ve been focusing on this area.
From collecting paperwork to negotiating with creditors, bankruptcy cases can be complex. An experienced Chapter 7 attorney will thoroughly analyze your financial situation, including debts, assets, income, and expenses, to determine the best course of action. They also keep up with federal and national laws to ensure compliance.
2.Will I Pass the Means Test?
Speaking of compliance, not everyone can qualify for a Chapter 7 bankruptcy. An individual or business filing for Chapter 7 bankruptcy has to pass an assessment test. The means test, mandated under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, is designed to see if a debtor can afford to repay at least some of their debts.
The first step is to calculate the debtor’s current monthly income, which includes wages, salaries, bonuses, and rental income received over the last six months. The total income is divided by six to get an average, which is then compared to the state median income.
The debtor qualifies for Chapter 7 bankruptcy if the average income is less than the state median. However, if your income exceeds the median, additional calculations are required. In such cases, lawyers often recommend filing for Chapter 13 bankruptcy.
A reliable Chapter 7 attorney will take everything into consideration and determine whether you can pass the means test or not.
3.How Long Does the Process Take?
Next, ask your lawyer to assess the strengths and weaknesses of your case to predict a timeline. Most Chapter 7 bankruptcy cases take 4 to 6 months to resolve from the date of filing to the final discharge of debts.
Here’s a closer look at the process:
- Filing the petition
- Automatic stay, which halts all actions of creditors
- Meeting of creditors with the bankruptcy trustee
- Rechecking of all the paperwork to ensure compliance
- Discharge of debts
4.What are Your Fees?
Lastly, inquire about the lawyer’s fees and any additional costs. Most Chapter 7 bankruptcy lawyers get paid upfront before the case is filed. They charge a flat fee, which covers all additional expenses associated with the case.
Check the industry reputation of the attorney you’re working with. Read previous client reviews and ensure the attorney is transparent about their fees. This will save you from further financial misfortunes.
