Our Arizona Bankruptcy Team Discusses The Advantages Of Retaining a Lawyer Versus Filing Bankruptcy Yourself
Most people who are considering bankruptcy don’t have a lot of money sitting in their bank accounts with no outstanding necessary expenses. Bankruptcy, especially Chapter 7 bankruptcy, isn’t meant for people with thousands of dollars to spare. But the upfront costs of discharging debts through bankruptcy can actually be quite daunting. The filing fees alone are $338 for a Chapter 7 bankruptcy and $313 for a Chapter 13 bankruptcy. So when you tack on the additional cost of retaining a bankruptcy attorney, you may be wondering if you can save money by representing yourself. This can be doable in extremely simple Chapter 7 bankruptcy cases, but many factors can make it beneficial to retain bankruptcy counsel.
On the fence about Filing Bankruptcy in Arizona, consider the following reasons why it is useful to retain an experienced bankruptcy attorney when you file bankruptcy.
1. Your Creditors Must Stop Contacting You
One of the great benefits of hiring a bankruptcy attorney is that once you inform your creditors of your retainer, they must contact your attorney directly instead of you. Your bankruptcy attorney will become their point of contact as you prepare your petition for filing. This can reduce distractions while you gather your documents and complete your credit counseling courses. Your bankruptcy attorney can seek sanctions against your creditors if they continue to contact you with the knowledge that you are represented by an attorney.
2. Be Sure You File The Right Chapter
The vast majority of people who file bankruptcy use either Chapter 7 or Chapter 13. These two bankruptcy chapters are different in many aspects, and you could face negative consequences for filing under the wrong chapter. For example, your case may be dismissed, or your unprotected assets might be seized by your bankruptcy trustee to satisfy your estate’s debts. The first step to checking your bankruptcy eligibility is to calculate your average monthly income. Your income, as well as any other household members’ income, will be averaged out over the previous six months. Finding this number can actually be quite complicated for those who aren’t paid on a strictly salaried basis. It is also easy for those without bankruptcy experience to make mistakes on the Means Test, which determines how much disposable monthly income the debtor has available. Your bankruptcy attorney will make sure that you qualify for the chapter that you file, and if you qualify for both, you choose the more advantageous option.
3. Make Sure Bankruptcy Is Truly Your Best Option
Bankruptcy might not be the most effective form of debt relief for everyone. Our Arizona bankruptcy lawyers will let you know if it is really worth your while to file bankruptcy. Negotiating your creditors or using formal debt settlement may achieve your goals with less downsides than bankruptcy. Your income may be mostly exempt from creditors. Or, you might qualify for hardship programs that discharge debts from different types of debtors, such as hospitals.
4. Draft Your Bankruptcy Petition Clearly & Correctly
A bankruptcy petition isn’t a simple form you can pick up at the courthouse and fill out in ten minutes. Most bankruptcy petitions are at least 50-60 pages long. This gives you 50-60 pages’ worth of opportunities to make mistakes that could hurt your financial situation for years to come. Our Phoenix bankruptcy team has the knowledge and experience to complete your petition in an expedient manner. You can submit your documents through our convenient and secure online portal, and we will take care of the rest.
5. Filing Chapter 13? It’s hardly An Option
As mentioned above, you might be able to get away with representing yourself if you are filing a highly simple Chapter 7 bankruptcy. Only about 2/3 of Chapter 7 cases filed without an attorney are discharged, compared to more than 90% of Chapter 7 cases filed with an attorney. The difference is even more dramatic in a Chapter 13 bankruptcy. The discharge rates are much lower for Chapter 13 in general, but less than 1% of Chapter 13 bankruptcy filed pro se, or under self representation, are discharged.
6. Execute a Skeleton Filing For Emergency Circumstances
Many of our clients come to us on the eve of a home foreclosure, vehicle repossession, or wage garnishment. When a bankruptcy petition is filed, the Automatic Stay goes into place and protects the filer against such creditor actions. But completing a standard bankruptcy petition can take a while, so you may need to use a skeleton filing. A skeleton bankruptcy petition, also known as an emergency bankruptcy petition, only needs the debtor’s basic contact information and income information. The debtor must also complete the online credit counseling course before filing an emergency petition. They will have 2 weeks to submit everything else with the court. An attorney will make sure that this is all completed correctly and within the 2 week time limit.
7. A Bankruptcy Attorney Is More Familiar With Bankruptcy Procedures Than You
If you had the specific education and experience that a bankruptcy attorney has, you probably wouldn’t be reading this article right now. An Arizona bankruptcy attorney will be able to check your qualifications, review your assets, and even estimate Chapter 13 plan payments in just a few minutes, which would probably take hours of research on your own. All of this needs to be done before you can even start on your bankruptcy petition, which will be several more hours’ work. Your Tucson bankruptcy lawyer will shoulder the burden for you, leaving you more time to focus on fixing your financial situation so you don’t wind up filing bankruptcy again.
8. Hiring a Bankruptcy Attorney Might Be More Affordable Than You Would Think
It’s true that bankruptcy attorneys’ fees usually far exceed filing fees, which can be difficult for most debtors to manage. Thankfully, you might be eligible to pay your bankruptcy expenses in a budget-friendly payment plan.
Chapter 13 bankruptcy in Arizona is a reorganization payment plan, and bankruptcy trustee and attorney’s fees are the first debt to be paid in the plan. Your Chapter 13 bankruptcy attorney may be flexible in how much money they require up front, and how much of your attorney’s fees can be worked into your payment plan.
Chapter 7 bankruptcy in Arizona is trickier because all unsecured debts, including attorney’s fees, that are incurred before filing will be discharged. So if a Chapter 7 attorney offers to let you pay for your fees after your case has been filed, their fees will technically be discharged with the rest of your debts. Most Arizona Bankruptcy Lawyers require all of their fees up front.
Arizona Zero Down Bankruptcy: Our Arizona bankruptcy attorneys offer a creative solution that allows for our clients to pay for a Chapter 7 bankruptcy in affordable installments. We will utilize a skeleton filing and only charge you for work completed after your skeleton petition is filed, and you can begin accruing debts once more. Therefore, your payment plan includes a 0% interest rate, payable in 12 months. Additionally, your plan will even include credit reporting, so your timely payments will help you build a new positive credit history after your slate has been wiped clean.
To get started on the road to becoming debt free, call 602-609-7000 and request to speak with one of our experienced Arizona bankruptcy lawyers today. Plus, our consultations and debt evaluations are free of charge. Contact Arizona Zero Down Bankruptcy today and get the “Fresh Start” that you are seeking.