The Bankruptcy Process: Stage 2 – The Determination

Leave Debt Behind - The Bankruptcy Process

Leave Debt Behind - BankruptcyIn The Bankruptcy Process: Stage 1 – The Decision, we talked about how you would make the decision about which way to move with your financial road. However, even though you have decided that the bankruptcy process is the right path for you, the actual decision is not yours.

Finding an Attorney

Your next step is to contact a bankruptcy attorney. The ideal way to find someone is through a personal referral from someone you know. While it’s not necessary to divulge to anyone why you need an attorney, simply ask for a recommendation and then check to see if the recommended attorney handles bankruptcies.

You’ll want an attorney who has experience in your area. Thus, NEVER hire someone who does not live in the same district as the bankruptcy court that will handle your case. Granted, this could mean that while the attorney isn’t in your city, county, or state, he/she has familiar with the court district you are in as well as the specific courthouse location that you are closest too. How do you find out? First, go to the Federal Courts website.  Next, on the map displayed, click on your STATE. A new page opens and displays a list of all courts in your state. Finally, locate the specific bankruptcy court closet to you (and this may be in another city or county). You should begin your search for an attorney around that location.

While we would hope you could find an attorney that fits your needs on the first try, it might not happen – and that’s fine. If you have to interview more than one, do it. However, realize that just because you interview someone else doesn’t mean your situation will change as to how your case is handled.

Bankruptcy law is finite – especially now that technology plays such a huge role. Choose based upon whom you feel most comfortable as this will be an emotional rollercoaster ride, and you want someone who’s a match for personality and needs as well the best legal representative you can get.

Clear Bankruptcy is a good place to start to look for a bankruptcy attorney.

The Initial Meeting

The first time you meet, the attorney is going to do a preliminary review of your information. You will be asked to bring certain documentation to this meeting such as paycheck stubs, bills, etc. During the meeting the attorney (or potential his/her paralegal or some other member of his/her staff) will be looking for a few things: (1) what your income entitles you too according to the bankruptcy rules, and (2) the vastness of your financial condition or debt. This is where things can get tricky.

There is the likelihood that, while you are underwater with bills, your income may be too high to qualify for bankruptcy. In that case, you would have to look at other factors (debt consolidation, etc.). In my case, my husband and I had no children, and our income was too high. Thus, we had to wait until my husband had been unemployed for 3 months to bring our income in line with our debt.

Paying the Attorney’s Fee

The next shocker (and I’ll explain why it’s a shocker in a minute) is that the attorney will give quote you a fee for his services. The shocker is that you’re there because you have no money yet you’re going to have to pay money to get out of debt. Understand this: if you are able to file for bankruptcy, you will immediately stop paying all bills (except potentially your house mortgage). Since you can potentially put off bill collectors for 2-3 months, which is more than enough time to save the fee. (Our fee, in Georgia, for a well-qualified attorney, was around $1300.) The attorney will guide you since he/she knows that to be paid, there has to be close to a 100% chance that your bankruptcy claim will be accepted by the court.

Once you all agree that this is the best route, you’ll start preparing for your next meeting during which you review and assemble all the documentation to attach with your filing. That’s forthcoming in, The Bankruptcy Process: Stage 3 – The Documentation.

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