3 Things to Ask Bankruptcy Lawyer Before Choosing One to Represent You
For most people that think about it, the decision to file for bankruptcy is not an easy one. There are often feelings of failure and defeat attached to a filing. I think many of us take on credit with the full intention of paying, and try to pay back debts. That being said, life happens and people still need to file for bankruptcy. (For instance, here in the Eastern District of NY – Brooklyn Division, there have been about 2600 chapter 7 bankruptcies filed from January 2016 through July 2016.) If you or someone you know is thinking about filing for bankruptcy, having an attorney represent you can help make the process smooth, and be there for you in case troubles arise, especially in the face of these feelings. Here are three things to ask and know about a bankruptcy attorney before you decide to retain them.
(1) Does the attorney accept post-dated checks or post-petition fees?
If the attorney you’re consulting with tells you that he or she accepts fees for a chapter 7 case post-petition or accepts post-dated checks, be very cautious. A debt for attorney’s fees is just like most any other dischargeable debt, and is also included in the bankruptcy case. While you can elect to pay an attorney after you’re case is filed, you have no obligation to do so. A post-dated check that’s cashed after the filing of the bankruptcy case is a violation of the automatic stay and/or discharge injunction. Some courts around the country have allowed attorney’s fees to be split into pre-petition payment and post-petition payment, but that division of services has to be spelled out in separate, detailed agreements outlining the specific services included pre-filing, what services would be included post-filing, as well as rights of the debtor to proceed pro se or seek another attorney. So if you find yourself looking for a bankruptcy attorney, if you’re being offered a low pre-filing retainer charge, and then a payment plan after the filing or payment of fees with post-dated checks, you may want to think about taking your business and your case elsewhere.
(2) Does the attorney appear with you at your 341 hearing?
The 341 hearing is often the only court appearance most people who file for bankruptcy have in their case. It’s a 5-to-10 minute interview with the trustee assigned to your case to review the accuracy of your filings, and whether your estate has any assets to liquidate. All of my clients expect me to attend the hearing with them, and I try to. (I’ve only missed 2 hearings in my career so far, and that was because I was bedridden in a hospital.) What many bankruptcy practices do is pay a per diem attorney to attend the 341 hearing in their place. I have nothing against per diem attorneys. I know a few of them and they are knowledgeable, and do the best they can with what they’re given. The problem arises when a trustee’s line of questioning enters an area that the per diem attorney may be unfamiliar with (maybe concerning a particular asset or transfer of asset). Any attorney who appears on your behalf affirms to the court that they are fully familiar with the facts and circumstances of your case, but that may not be the case if the attorney you retained (or another attorney from within the office) does not appear with you at the 341 meeting. So if you’re in the market for an attorney to represent you in a bankruptcy case, ask whether they (or someone within the office) will be appearing with you at the 341 hearing, or whether they intend to send a per diem attorney.
(3) Will the attorney represent you in response to a motion/adversary proceeding?
As a bankruptcy attorney, I try to do my best to forecast what the trajectory of a case may be (what are the danger spots, what might a trustee seek to recover, etc.) Sometimes, though, something happens that you may not have planned for. In those circumstances, you, as the bankruptcy debtor, will likely be facing some kind of motion or an adversary proceeding. You definitely want to know whether the attorney you retained handles motion or adversary proceeding work. (Bankruptcy, especially chapter 7 cases, can be pretty administrative. Motions and adversary proceedings are what you traditionally think of as litigation. Some bankruptcy attorneys only handle the administrative case matters, but not litigation.) If the attorney you’re thinking about retaining does not handle motion or AP work, you may be stuck having to find an attorney that does do that work and is willing to take on your case. You may have to enter into a separate retention agreement for motion or AP representation (that’s how I do it), it would definitely make things easier for you having the same attorney that filed your petition to also represent you in bankruptcy litigation, so you’ll definitely want to know whether they handle that work.