In this article, we'll explore whether you need an attorney to file bankruptcy, how you can make sure you hire the bankruptcy attorney that is right for you, and what kind of resources are available to find a bankruptcy lawyer near you. Learn how to choose the right bankrutpcy lawyer for your situation based on what matters most!
Written by Attorney Andrea Wimmer.
Updated November 25, 2020
Folks in need of debt relief often wonder how they’re supposed to be able to hire a law firm when they already don't have enough money to make ends meet. One of the reasons they need a fresh start you can get only by filing bankruptcy is not having enough money, after all.
Depending on the type of bankruptcy you think you'll need, it may or may not make sense to hire a bankruptcy attorney to help you. In this article, we'll explore whether you need an attorney to file bankruptcy, how you can make sure you hire the bankruptcy attorney that is right for you, and what kind of resources are available to find a bankruptcy lawyer near you.
Do I need a bankruptcy attorney?
Let me start by saying this: You do not have to hire a lawyer to help you with your bankruptcy case. As long as you are filing as an individual (or married couple) and not as a business, you don’t have to be represented by a lawyer in the U.S. Bankruptcy Court.
If you have a small business that you're running as a sole proprietor, you don't need to hire a lawyer either. Only business entities that file bankruptcy, like Skymall, Sears, or Trump Taj Mahal have to hire legal counsel in order to file bankruptcy.
So, I don't need an attorney?
Just because the law doesn't require you to have a lawyer, doesn't necessarily mean that you don't need one. It's important to keep in mind that - depending on the unique circumstances of your case - paying a lawyer may save you money in the long run. Since only lawyers are able to give you legal advice, it rarely (if ever) makes sense to pay a paralegal to fill out the forms for you.
Ultimately, whether you need to hire a bankruptcy attorney to help you file bankruptcy depends a lot on your specific situation and how comfortable you are handling things on your own vs. working with someone. Let’s explore what that means.
Do I need a bankruptcy attorney for Chapter 7 bankruptcy? It depends....
If the majority of your debt is credit card debt, medical bills, and payday loans and you don't own a home or other expensive property, chances are you can file your Chapter 7 bankruptcy on your own ("pro se") without hiring a bankruptcy lawyer.
If debt collectors are calling you constantly, even if a garnishment has already started, a Chapter 7 bankruptcy will help you stop all collection efforts immediately. There are plenty of how-to guides available in addition to whatever resources your state’s Bankruptcy Court may offer.
If you own real estate or have assets you're worried about losing, then hiring a lawyer can give you peace of mind. After all, the lawyers first responsibility in providing you with legal services is to do so with your best interest in mind.
Do I need a bankruptcy attorney for Chapter 13 bankruptcy? Probably, yes....
On the other hand, if you're dealing with slightly more complicated issues, have expensive property you want to safeguard from your creditors, or need to catch up a mortgage, then Chapter 13 bankruptcy is a better fit for you.
Chapter 13 bankruptcy allows you to set up a repayment plan to bring your mortgage current over 3 - 5 years and so avoid a foreclosure. As foreclosure defense, it is absolute, assuming you can afford to start making your regular mortgage payments again and have enough disposable income to catch up the arrearages through your Chapter 13 repayment plan.
If you’re filing bankruptcy under Chapter 13, you should hire a competent bankruptcy attorney near you to help you with it. The Chapter 13 process is difficult to navigate without the help of a lawyer and less than 3% of cases filed without a lawyer end in successful plan completion nationwide.
Since completing the plan is needed to get your discharge at the end, hiring a lawyer to help you file a Chapter 13 bankruptcy is highly recommended and will save you from a lot of worries in the long run.
Other things to keep in mind when deciding whether to hire a bankruptcy lawyer
Finally, it's a good idea to reflect a little bit on your own habits. If you're the type of person that gives their tax preparer a fully completed questionnaire with all supporting documents attached and organized, you're good at following (sometimes tedious) instructions. This means you're likely perfectly capable of filing a simple Chapter 7 bankruptcy without a lawyer by following the Court’s instructions and/or working with Upsolve.
If you hate detail work and are more of a big picture person who brings a grocery bag full of receipts to their appointment at H & R Block every spring, you'll likely benefit from having a lawyer. You'll still have to provide all of the same information, but the bankruptcy attorney and their paralegal can help you make sure that you're checking all the boxes and dotting all the I's.
This is especially important if you're worried about your credit score. If you file bankruptcy without a lawyer and the case is dismissed (thrown out) because you didn't file all necessary documents, your credit report will still show the bankruptcy as having been filed.
If you file again later, your credit score will take another hit due to a second bankruptcy filing. Plus, you may not receive the full protections of the automatic stay during your second case. And all of that is on top of having to pay another filing fee to the Bankruptcy Court.
So, be honest in your assessment of yourself and your ability to get and stay organized enough to file bankruptcy on your own without a lawyer. Ultimately, you’re the one that will be most affected by your decision on whether to hire a lawyer to help you file bankruptcy.
How to find a bankruptcy attorney
Bankruptcy lawyers know that folks who need help filing bankruptcy don't really have a lot of money to spend on attorney fees. And they know that most can't afford to find the right lawyer by paying a lot of money for an initial meeting with a bunch of lawyers. That's why most consumer bankruptcy attorneys offer free initial consultations for potential new clients.
These free consultations are your opportunity to learn more about bankruptcy in general, what type of bankruptcy is likely in your best interest given your specific financial situation, and how the bankruptcy process works in general.
Take advantage of these free consultations! It's a risk free way to find out whether you need a lawyer to help you file bankruptcy. It only costs you time and, in addition to learning more about the bankruptcy process, you get to interview the attorney to find out if they'd be a good fit for you.
Ideally, come prepared with your questions about Chapter 7 and Chapter 13, if you already have some. If not, just be sure to have a good idea of your overall financial situation. That's the only way the lawyer will be able to tell you whether the Bankruptcy Court can give you the kind of debt relief you’re looking for.
How do I know which bankruptcy lawyer is right for me?
No two bankruptcy cases are the same, and no two bankruptcy lawyers are the same. When you're looking for a bankruptcy lawyer, the first thing you should do is look for lawyers that specifically list the practice area of bankruptcy on their website. Just because someone is known in the entire state for being a top-notch foreclosure defense attorney, doesn't mean they know anything about filing bankruptcy.
Similarly, the fact that an attorney listed bankruptcy as a practice area on their profile with the state bar association (the organization that governs lawyers) doesn't automatically mean that they're the best person to help you.
A lot of bankruptcy attorneys do nothing other than bankruptcy cases. These folks are often your best bet, as they live and breathe the bankruptcy laws on a daily basis. Often this means they belong to a local or national organization of bankruptcy lawyers. The National Association of Consumer Bankruptcy Attorneys (NACBA) is the only national organization for consumer bankruptcy lawyers - folks that help regular people file bankruptcy. When in doubt, it can't hurt to check out their tool to find a consumer bankruptcy attorney near you.
Finally, keeping in mind that folks are always more likely to write a review when they’re mad about something, consider looking up any attorney reviews you can find for the lawyer or the law firm you’re considering. You never know what you might find.
Speaking of law firms, you may notice that a lot of bankruptcy lawyers are either on their own (solo practitioners) or part of a small firm. Typically, only the bankruptcy mills that advertise on billboards and on the side of city buses have more than a few lawyers doing nothing other than bankruptcy work.
Whether you go with a large law firm or a small firm or solo attorney is a matter of personal preference. Just keep in mind that the smaller shops can be (and usually are) a lot more flexible on a number of issues.
In a large law firm setting, you might get the benefit of extended hours or a quicker turnaround time, but it's possible that you'll never really get to talk to a lawyer, only their paralegal. In short, don’t hire a bankruptcy mill hoping for the attention only a solo practitioner can give you. Don’t hire a solo or small firm and expect that they’ll have all of the bells and whistles that come with a larger operation, such as a fancy client portal, for example.
What about the attorney fees?
How much the lawyer quotes you for filing bankruptcy should be one factor, but not THE factor that you use to determine whether to hire a lawyer to help you file bankruptcy and get the debt relief you need. Chances are, you have an idea of the general range that local bankruptcy attorneys are charging in your area, so be careful with quotes for legal services that seem much lower (or higher) than the average you've been seeing.
As with everything in life, you get what you pay for and some things are too good to be true. Receiving high quality legal services and legal advice comes with a price. In the end, the question should be whether the price and payment arrangement proposed by the bankruptcy attorney you liked the best works for you.
So, what’s the X-Factor?
Let's say you met with a couple of lawyers in town who both quoted you approximately the same amount for your bankruptcy case. In that case, don't go with the cheapest option and don't go with the closest one, either. Go with the option that makes the most sense for you.
All bankruptcy lawyers have a system they follow to handle their clients’ Chapter 7 and Chapter 13 cases as efficiently as possible. If you're not great on the computer, don't go with the lawyer that will have you fill out a questionnaire online. If you prefer one-on-one interaction on a regular basis rather than staying in touch by phone or email, don't go with the lawyer that's already told you that you'll only see them one more time in person before filing bankruptcy.
The attorney-client relationship is an important give-and-take where everyone should be acting in the client's (your) best interest. Sometimes that can mean having to make a hard choice. Since you'll be talking with your bankruptcy attorney quite a bit during the process of filing bankruptcy, go with the person whose style, demeanor, and approach most closely match your own. Ultimately, you have to trust your lawyer, and they have to be able to trust you to ensure your best interests are protected.
Individuals (and married couples) don't have to hire a bankruptcy attorney to get debt relief by filing bankruptcy. Some straightforward cases can be filed without the need for any legal advice, either completely own your own, or through Upsolve, if you're eligible.
If you can afford to hire a bankruptcy lawyer, it can be the best investment you can make to ensure a successful bankruptcy filing and fresh start. This is especially true if you're worried about losing certain property or need to file Chapter 13 bankruptcy to meet your goals.
Finding the right bankruptcy lawyer will take a little bit of work on your end, but with most bankruptcy attorneys giving free consultations, it won't cost you any money. Plus, it’s a great opportunity to find out more about the different types of bankruptcy and the bankruptcy process.
Once you have a better idea of how everything works, including what to expect at the meeting of creditors, go with the bankruptcy lawyer that makes you feel most comfortable.
- American Bankruptcy Institute. (2017, August). Success Rates in Chapter 13. ABI Journal . Retrieved November 25, 2020, from https://s3.amazonaws.com/abi-org-corp/journals/numbers_08-17.pdf