When tough economy strikes, entrepreneurs who face the worst challenge of their business are at a loss whom should they see. The experts who can help them are bankruptcy lawyers. A bankruptcy lawyer reviews a potential client’s assets, income and debts to determine if bankruptcy is the best course of action for the latter. If it is, then the lawyer would enter into a contract with the client to proceed with the bankruptcy case.
While any lawyer can handle a bankruptcy, a bankruptcy attorney is an expert. Most often, he is better than those who advertise numerous expertise or are masters-of-none types.
Whoever thinks about filing a bankruptcy would want to know beforehand the 3 hiring a bankruptcy lawyer. When filing for Chapter 7 bankruptcy, most attorney fees are based on the case’s complication. This means those with lots of assets or have higher income may pay the attorney more than a person with no assets. Generally, the average cost of a bankruptcy lawyer for a Chapter 7 case may range from $1,500-$3,000.
For a Chapter 13 case, most courts have guidelines when it comes to average cost of a bankruptcy lawyer. It can range from $3,000 to $4,000. Attorneys are not allowed to charge their clients more than what is the guideline fee which differs for each judicial district.
When it comes to an upfront lawyer fee, it depends on the attorney. The average cost of a bankruptcy lawyer’s upfront fee is about half of the total fee prior the filing the case.
When in the midst of bankruptcy, people consider an attorney’s expertise, experience and reputation. Most importantly, they want to know the average cost a bankruptcy lawyer as they are in a financial dilemma in the first place.
Before filing the petition
Even before the bankruptcy petition, the lawyer would already determine what chapter of the client’s bankruptcy to file and decide on when to file. He will evaluate his client’s financial situation and determine if filing for bankruptcy is the best option. The lawyer likewise determines if the client will be financially better after the filing.
Filing the petition
The bankruptcy lawyer then prepares the petition by collecting information from his client like tax returns, credit reports, creditor information, paycheck stubs and bank statements. The date of the petition filing with the court should be appropriate because the bankruptcy trustee, the one who oversees the matter, may garnish the money the debtor has in his bank on the day of filing. Hence, most debtors file before their payday, or after paying their utilities, so their accounts are depleted.
The bankruptcy lawyer will look over the client’s additional information carefully, like prior property transactions and monthly expenses. Throughout the case, the lawyers will always consider if the bankruptcy trustee suspects a fraud. Though fraud is usually not a problem, it is the bankruptcy lawyer’s first concern, and his job is to steer his client away from problems.
For example, the trustee may suspect a fraud if he sees a higher-than-average expenses and believes that the client overestimates monthly bills as an attempt to avoid paying his creditors. The trustee may oversee a bank deposit box or a storage facility to ensure the debtor has accounted for all properties.