How to Find an Affordable Bankruptcy Attorney

The very fact that an individual is considering bankruptcy speaks to the difficulty in paying an attorney to help you file. If you’re in debt, does it make more sense to add debt to get out of debt?

But … that is how the system works, and it won’t change because we don’t like it.

The best approach is to try to find the most affordable attorney possible, while also remembering the importance of choosing a reputable bankruptcy attorney. As with any consumer choice, the cheapest might not always be the best. Going for the bargain can often lead to more expenses. This could be one of the times ”You get what you pay for.”

There are ways and options to find a cost-effective attorney, though it might not always be easy. Some of the places to look include:

• The state bar association.
• The National Association of Consumer Bankruptcy Attorneys.
• The American Bankruptcy Institute web site.
• Your local bankruptcy court.
• Online help from bankruptcy associations.
• The payment plan offered in Chapter 13.
• Legal aid.
• Legal clinics.
• Finding the best option: An attorney who will work pro bono, or for free.

One experienced bankruptcy attorney does not think it difficult.

“You can find reasonably price attorneys everywhere,” said Jon Lieberman, a partner and bankruptcy attorney in the Loveland, Ohio, law Firm of Scottile & Barile. “The prices are very reasonable. The more complex your case and the more experienced your lawyer, the more the attorney may charge.

“But there’s no reason to have to pay a fortune for bankruptcy.”

Finding a Low Income Bankruptcy Lawyer in Your Area

Here’s an excellent place to start: The American Bankruptcy Institute has a page that lists and links bankruptcy attorneys in your state and area. Clicking, for example, on “Ohio” leads to a list of 22 cities with references to ABI member attorneys in those cities.

The best part: A tab at the top of the page provides a link to “Pro Bono Resources.” Many states have multiple pages of pro bono attorneys, who volunteer their time at no cost.  It all begins on the page titled Bankruptcy Resources.

Another option is with bar association, the governing body for attorneys in each state. Many bankruptcy attorneys have taken to advertising their firm or themselves as “affordable” on the internet. They may be, but they should be checked out to the best extent possible. The state bar can provide a list of bankruptcy lawyers in your zip code. It also may (emphasis on may) have a list of lawyers willing to work pro bono, or at a reduced rate. At the least, the state bar should be able to provide some reputable names you can check into.

The website of the National Association of Consumer Bankruptcy Attorneys boasts on its Consumer Assistance page that it has “some tips to help point you in the right direction” when seeking an attorney.

Hiring a paralegal is an option, but a paralegal cannot give legal advice, and may not even be allowed to help with filings depending on the rules in a particular state or bankruptcy court.

The idea of hiring a firm may be appealing, but it’s also possible to get lost in the corridors of a busier firm. A firm that churns out bankruptcy filings may not give the personal attention you expect and want. An individual attorney may be able to provide that.

Any attorney you choose can be checked out via Google. If putting his or her name in search results in stories of poor work and representation, consider yourself warned.

Utilize Payment Plans

One key fact to always remember about attorneys: The first meeting, called a consult, is free. That meeting allows you to lay out your situation, and gives the attorney the chance to offer suggestions or help. Listen carefully. The way the attorney approaches your case will tell you something about how reputable he or she is.

Lieberman points out that those filing Chapter 13 bankruptcy (a payment plan for debts) can do so with no money down, then spread the payments out over time. Given the complexities of Chapter 13, an attorney typically is needed.

“In Chapter 13, many filers will do it with no money down,” Lieberman said. “Then the debtor agrees to pay a little each month to the courts. In Chapter 13 in almost every jurisdiction there are attorneys who will agree to be paid through the bankruptcy process.

“No money down Chapter 13 filings are all over the country.”

Attorneys also typically will accept what Lieberman calls a bifurcated fee arrangement when filing Chapter 7 (liquidation to pay debts). That means the filer pays a little bit before filing and the rest after.

Lieberman added that many bankruptcy courts have what are called “no-look fees.”

“It’s a flat rate,” he said. “Everybody charges the same. And they’re paid through the bankruptcy. If it’s an experienced attorney or a lawyer right out of law school doing the work, it’s a no-look fee and the court does not question it.”

Most courts have local rules or fee guidelines that set a reasonable fee level or a no-look fee for Chapter 13 bankruptcy. If the amount charged is equal or less than what is deemed reasonable, the court will not question the fees. Chapter 13 bankruptcy requires that attorneys disclose fees for the court’s approval. If the charges make the court go tilt, the court is supposed to challenge the fees. If the judge finds the fees excessive, he or she can order a partial or full refund.

The best way to find this information is to review the rules of the bankruptcy court website for your area. Lieberman said everyone thinking of filing should start with that web site to gain the best understanding of rules and procedures. The Court Locator tool will help you find the bankruptcy court in your area.

How to Utilize Reduced or Free Legal Services for Bankruptcy

Organizations that provide aid services can sometimes be the best option to find financial help with filing. These organizations are nonprofits that do the same work as the bankruptcy attorney, but usually do it for free.

• Legal Aid Society or Legal Aid Services: Legal Aid is nonprofit group that offers free legal help to those in need. Legal Aid groups will help if your income is less than 125% of the federal poverty guidelines, or no more than 200% when other factors are considered. The best thing to do about seeing if you qualify for Legal Aid is to find the nearest office and simply call them. If it takes three or four calls, it is probably worth the time; they are there to help. The American Bankruptcy Institute’s help page lists Legal Aid groups on its Pro Bono Resources page.

• Legal clinics: Local legal groups, bar associations and social service agencies sometimes offer clinics that provide answers to commonly asked bankruptcy questions. There may even be a lawyer or referral to a lawyer who will do the work pro bono. The local bar association should be able to guide you to the clinics; Google works as well.

• Pro bono legal services: The dream of all of us who face legal fees: Finding someone will do the work for free. Attorneys are encouraged to donate time to help those in need. The local bar association and the ABI web site are good places to start.

Filing Bankruptcy by Yourself

It’s not necessary to hire a bankruptcy lawyer. You can file bankruptcy on your own, otherwise called pro se. The question is whether that approach is wise?

Bankruptcy can be complicated, and attorneys who work in the field have a depth and breadth of knowledge the average person lacks. The general recommendation from experts is that it’s always wise to use an attorney when filing Chapter 13. Chapter 7 may be simpler, so there are times when an individual can complete a pro se Chapter 7 filing.

When might this be true? If you do not have:

• A car or home loan.
• Your own business.
• Property other than necessary items
• Nondischargeable debts, such as student loans or child or spousal support.

Be warned: The risk of filing without an attorney is significant, and the consequences of filing for bankruptcy are large.

A filer also can protect assets by filing for exemptions for necessary items like a home or car (needed to get to and from work), but he or she has to know how to do it and where to find Schedule C: The Property You Claim as Exempt. A survey done by ABI in 2018 showed that if exemption paperwork is filed properly, 93% of filers in the United States are able to protect their assets.

But when it’s not done properly, the filer could lose the home and car as a requirement to pay the debts. A bankruptcy court will not be forgiving if an individual who files pro se does not understand the rules, or says the attorney fees were not affordable.

“There’s really no reason why somebody shouldn’t have a lawyer,” Lieberman said. “Unless you have the most basic Chapter 7, but even that can create problems. Most people don’t know what to bring to court, what the court needs, what the court is talking about. I’ve been doing this for 30 years.”

How to Pay Bankruptcy Court Filing Fees

Bankruptcy fees — $338 for Chapter 7, $313 for Chapter 13 – can be paid in installments, or if the need is great, even waived. The fee can be waived if you can show that your income is below 150% of the poverty level for your size family in your state, and (this is important) that you do not have the wherewithal to pay the fees in installments. To try and have fees waived, file Form 103B: Application to Have the Chapter 7 Filing Fee Waived.

You can apply to have the fees paid installments, spread out over as many as four payments. Seek out and file Form 103A, Application to Pay the Filing Fee in Installments. The form will ask you to submit a payment plan, and it cannot last longer than 120 days.

Whatever way it’s done, paying the fees is vital. Bankruptcy courts do not look kindly on filers who do not pay fees in full and on time.

Pre-Bankruptcy Credit Counseling

The bankruptcy process includes a pre-bankruptcy credit counseling course that is completed before filing to help you determine if you, in fact, need to file. There also is a financial management course taken after filing. The courses are taken through approved providers, and typically are run by nonprofit credit counseling agencies that charge, at most, $50 for both.

It always helps to talk to a professional as you sort through the option of even filing for bankruptcy. A nonprofit credit counselor can go over finances, budgets and perhaps even offer a way to pay down debt without filing bankruptcy. Every person’s situation is different, so it may be smart simply to sit down and listen to some advice.