I read an article today on Marketwatch.com that inspired me to write this blog. The article was discussing how increased legal fees because of the new reform legislation may drive more people to try to file cases on their own. The article was a lot more neutral in giving advice about whether to use bankruptcy attorneys or not than I'm going to be. It is now more important than ever to spend the money on good bankruptcy lawyers to help you through your bankruptcy.
First of all, despite the increase in attorney fees that the article points out is anywhere from 10% - 75% depending on where you live, the price you pay for good representation is well worth it. Despite the increase in cost, bankruptcy cases are still a bargain in comparison with the cost of continuing to maintain your payments on debts you have no hope of paying off.
Your creditors have a seemingly endless group of high-priced attorneys working on their behalf to try to find ways to overcome your bankruptcy filing. Many tactics creditor's attorneys employ because the tactics work when dealing with an uninformed, inexperienced, and unrepresented debtor simply won't be employed by the creditor if you have legal counsel.
Third, as the article points out, bankruptcy can be much more expensive than an attorney fee if you don't do the paperwork properly. If you fail to file all the required paperwork within certain deadlines your case could be dismissed. While it is possible to file another case, you will have to pay filing fees over again. Not only that, but improper filings may cause you irreversible hardships. You risk losing your car or house that would not have been lost had you hired an attorney to ensure the paperwork gives you the protection you need. Also, if you have to file over again because the paperwork was not proper the first time, the bankruptcy law isn't as friendly with each subsequent filing. The automatic stay in a subsequent case may be limited in duration and there are other steps that need to be completed to insure the stay prevents creditors from taking action against you.
Finally, while some contend that the paperwork is "like filling out a tax form or a social security application" (Steve Elias, founding editor of Nolo, publisher of legal self-help guides), I would argue that completing paperwork is a minor portion of why you are hiring an attorney. Even if you are savvy enough to complete the paperwork properly, you still should have legal representation.
Good legal representation involves: advising you about the best bankruptcy options for your situation (a petition preparer can not give you this advice and you may not know all the specifics about all of your options; advising you how to protect as much of your property as possible, serving as your representative in dealing with your creditors; there are many inquiries creditors can make of debtors that would not violate the automatic stay, so if you represent yourself, you may still get phone calls from creditors asking you for information; serving as your representative in dealing with your trustee, protecting you from potential illegal collection actions by your creditors (your attorney knows what to do and say in dealing with a creditor who may be trying to take advantage of someone who isn't represented); filing the proper motions for relief from all sorts of potential issues; and advising you about the law in the event there is a dispute as to dischargeability or dismissal of the case, among other things.
Even most self-help publications advise debtors to hire attorneys and get good legal advice. Again, the risks of doing the case yourself and the hidden costs that could result from one misstep almost never outweigh the value you will get from obtaining good legal representation in your bankruptcy case. Remember, in most Chapter 7 cases anywhere in the country, your cost will be less than $2,000. If you think about how much money you are paying per month on your minimum payments to your creditors or how much money a creditor could garnish from your paycheck in the event the creditor obtains a judgment, the legal expenses pale in comparison.
http://www.legalhelpers.com/blog/2005_12_01_archive.html
