Putting off speaking to an attorney could hurt you, your family, your health and/or
even your sanity. If an attorney can offer a legal solution to help you, coming in earlier usually allows you better options,
may allow you to keep your property, pay some or all of your debts (or prevent you from getting even more debt you can't pay),
and help relieve stress sooner rather than later. Sometimes it helps just knowing the truth about what a creditor can and
can't do to you, since many people are mistaken about what happens if creditors aren't paid. Speaking to an attorney doesn't
mean you are going to file bankruptcy. It does mean you are going to learn what legal options an attorney sees in your case,
which may include bankruptcy or non-bankruptcy options.
Making sense of your problems and deciding on how to solve them is confusing. You need guidance to make
sure that whatever choices you make are right for you, and that the choices you make are made with accurate, impartial and
Why hire a lawyer? Well, I am a lawyer so what else is a lawyer going to say but you should hire a lawyer?
But in spite of my obvious bias, I do believe there are many advantages of seeing a good lawyer who knows the law and will
take the time to explain it to you.
When you pick a lawyer, you want someone whose law practice has a high enough concentration of bankruptcy
cases to be knowledgeable about the changes in the laws. Only an attorney who is licensed in your state can give you legal
advice. An experienced consumer bankruptcy attorney has a lot of resources and broad knowledge of many options to help clients.
As a lawyer, my job is to try to recommend the best solution I know of for my client. Too often,
credit counselors who offer "debt management programs" are focused on paying the debts, but not necessarily what is
best for the client. When I meet with a person, I look at their case and what I think is best for their particular situation.
If I can seea a way for them to get back on track and pay their debts, great, but I always start by focusing on the client.
My recommendation isn't always to file for bankruptcy. If I don't think bankruptcy is the best option for someone, I tell
them. If it is bankruptcy, then I want them to get correct advice so that the bankruptcy process goes as smoothly as possible.
I explain any options I know of, and if that includes bankruptcy I explain why I recommend it.
You should speak to an attorney who is licensed in your state to practice law, and
is experienced with bankruptcy and with bankruptcy law changes of 2005 Lawyers from other states are not allowed
to practice law in North Carolina without a N.C. license, and can not give any legal advice to you even though they are a
lawyer. Even though bankruptcy is federal law, it varies state to state, and even city to city for some issues so having
a lawyer who practices in your local area can be a good idea.
It is illegal for non-lawyers to give legal advice and to practice law without a law license; This is to protect the public.
Some non-lawyers know a lot, but not enough to give the best advice or sometimes the correct advice. If you choose to work
with a petition preparer service, all they can do is type exactly what you tell them and one N.C. Judge has said that
the fair fee for typing a petition is only about $80.00. If a preparer follows the law, even if a preparer knows the answer
you give is wrong they aren't supposed to correct you. The new bankruptcy law actually requires that I tell you that
you don't need to hire a lawyer to file for bankruptcy, and that you can file bankruptcy for yourself or hire a petition
preparer, but I never would recommend that someone file for themselves or use one of these services. There is just
too much that can go wrong without an experienced eye to prepare the case and if something goes wrong, it is often something
that a lawyer should not have missed, and it may not be able to be fixed later even if you hire a lawyer to do it.
Bankruptcy is more than just filling out forms, and you want someone who has experience
in identifying issues and guiding you through the process, as well as someone capable of working with you if issues come up. Sadly,
I see a lot a people who either file bankruptcy for themselves incorrectly, get some "help" doing so from friends
or online preparers, or from attorneys who are inexperienced or just don't do a good job. When they come
to me to try to fix the situation, I either often have to charge more to fix it than had I filed the case to begin with, and
sometimes I can't completely fix the problem anymore and we just deal with the best that can be done. I have seen people
who have lost their homes (unnecessarily). have lost other assets, have been denied a bankruptcy discharge, or have been "stuck"
with debts because the paperwork was incorrect and/or the actions they took weren't the right legal actions.
Please see the "Rumors and Problems" page on this website for some of the incorrect things and some outright lies that I have seen or heard, many from my own
Above all else you want to know the truth
about the law.
Attorneys are governed by ethical laws and their Bar Associations. If the advice given is incorrect or if they lie to you
then you have options you can take.
Some of the companies I see problems from:
Credit repair service (you can't repair an accurate credit report);
Credit counselors who take payments to settle your debts (but keep a lot of the money for themselves, may not be
able to settle all your debts, and use valuable time and money you could have used to resolve your situation in a bankruptcy
Non-profit credit counseling agencies who prepare debt management programs to pay your debts without regard to
your ability to actually afford the payments and have enough left to live on (many "non-profit agencies are under investigation
by the Internal Revenue Service);>
Credit counseling agencies who put you into programs that don't solve all your debt problems (and who you may pay
for years, but then still have to seek bankruptcy);
Online / document preparation service (all they are allowed to do is type - they can't give legal advice. I see
bankruptcy cases filed under the wrong chapter, poorly prepared documents, cases dismissed for incomplete or incorrect documents,
and incorrectly timed cases);
Home investor companies (they want to buy houses at really good deals - for them not you - and will usually only
"help" if there is enough profit in it for them);
Mortgage assistance companies who often contact you when a foreclosure is filed (and who takes your money up front
and often do what you could do yourself -call the mortgage company to see if they will work with you. Many appear to help
but make the situation worse, when Chapter 13 bankruptcy might have been a really good option. Note: if there
is a threat of foreclosure against you, you should speak to a bankruptcy attorney as soon as possible to see if she/he can
help you) It makes me so mad when I speak to a potential client who was foreclosed or is days away from
foreclosure who says that they thought the mortgage assistance company was handling everything and at the last minute they
were told they couldn't help them.
Or other agencies who scam you or make bad recommendations
These companies give a lot of bad advice and there is little you can do to. This is why they don't really worry about
how they do business. After all, what are you going to do to them?
Pro-Se Filing (Filing without a lawyer)
One of the biggest problems I have seen since the law changed is with people that tried to file their own
cases and didn't know what they were doing. This stuff is hard, even with experience. Each case is different
and if you don't know what happens in each situation, you can get into a lot of trouble. If things go wrong, you will
probably feel miserable, and wish you had hired a lawyer to start.
The new law has more pitfalls than the old law did. Those of us who work with it daily find
it doesn't make a lot of sense either, but at least we are more educated on what the Courts want and require.
The new law actually requires that I tell you that you don't need an attorney to file bankruptcy,
and that you can prepare the documents yourself or you can hire a non-attorney to prepare (type) your papers. The
problem is that this is very bad advice! So I am required to tell that to you, but I don't think
it is good advice and I do not recommend it.
The forms are available free, but they are very difficult to understand and I don't think most
people can fill out the paperwork by themselves correctly, or understand all the ramifications of filing. I don't believe
you should pay a non-lawyer to type your papers. They can't give legal advise and they can do it wrong as easily as
you can yourself! I have seen paralegals with years of experience in law offices who give inaccurate (wrong) legal
advice, (even though they weren't supposed to give advice at all).
Bankruptcy was complicated before the laws changed, and it is more complicated now. While some people may
be able to type up and file their own documents, if it is done incorrectly the problems that can come up may be problems
that 1) would have been known and/or avoided by an experienced attorney and 2) may require an attorney to fix it, and the fees
for the attorney are usually higher than doing it right to begin with and 3) the problems simply may not be "fixable"
no matter how good the attorney.
Filing without an experienced attorney to guide you through the process correctly can have serious
effects including loss of property (including your house or car), denial of discharge, dismissal, inability to refile (at
minimum without a lot more trouble), losing your chance to save your home or car, and many other problems, not to mention
causing great distress and headaches. Each time you file is counted against you, and there are new barriers and less
protections each time. Additionally, your credit rating may take a hit for each case filed.
Attorneys do cost money, and because our government decided to make the bankruptcy laws more complicated
for everyone, the work involved is more than it used to be and so are the costs. This makes it harder on you, and harder
on attorneys too. We are charging more, but not enough to cover the extra work that has been put upon us by this horribly
The good news is that consultations are usually given for
a low enough fee, or sometimes free, so that you can speak to an attorney first and find out what the attorney will do for
you. I have been in practice for almost 20 years, and my clients have been able to pay me for my services all those
years. You probably can too, once you see if bankruptcy is the right option for you, and what it will do for you.
Credit Counseling under the new bankruptcy law: 2 courses
(both fairly useless)
Under the 2005 law, credit counseling is required before
you file. You must take 2 courses - 1 before filing and 1 afterwards. If you file and you didn't take
it your bankruptcy will be dismissed except in extremely rare circumstances.
You can't just go to any
credit counseling program. You must use an official Bankruptcy Court Approved Counselor for a special pre-bankruptcy
Several agencies have been approved now for All Districts in North Carolina
(and AL). NC and AL have a slightly different system
than other states.
For states other than NC and Alabama see: Official Approved Credit Counseling Agencies - UST Website for all states and divisions .
The cost varies from company
to company from $5.00 to $50.00, and is required to be waived if you have no way to pay for it. The courses are
available over in person, over the internet, by phone, and can usually be completed in under two hours. Your
attorney will often have one or more companies they like to work with, and can explain why they recommend them.
file, you have to take another course - called Debtor Education or Financial Management Course. The second course
must be take after filing within a certain time period. If you don't, your case will be closed but you won't
get a Discharge from your debts, which is the point to filing bankruptcy.
several agencies, but the agency I recommend the most for bankruptcy counseling is Hummingbird Credit Counseling since they
will let anyone take the course for free over the Internet, and they only charge if/when you file bankruptcy and need documentation
to file. www.HummingbirdCreditCounseling.org. Prices for the courses are favorable for both bankruptcy
courses, they are committed to giving a good product, I haven't had problems with them, they are online/easy to use, and
I like how they handle payment options. If you don't need a certificate for a bankruptcy, they allow you to access
their education programs at no cost (free). Finally, they don't offer a debt management program and won't try
to talk you into repaying debts, which I worry about with companies who offer both debt management settlments and bankruptcy
I also recommend Institute for Financial Literacy (more expensive, but offers phone and
has some good educational material) and our local Consumer Credit Counseling which offers in person courses. There are
several other good ones too, but the main thing is that no counseling agency should be giving legal advice, but any lawyer
can give legal advice and discuss credit counseling.
You can speak to a bankruptcy attorney first about your financial situation.
You don't have to find a credit counselor on your own. We get information from many of them, and will be more familiar
with them. Attorneys will make sure you go through your Bankruptcy Counseling Course and receive your certificate
before your case is filed, if bankruptcy is the right option for you.
I do not recommend bankruptcy
if I know that a debt management program through a credit counseling agency is a better choice for the client -
I don't hesitate to tell the client that. Any good bankruptcy attorney can and should recommend a reputable
credit counseling agency when appropriate and compare it to bankruptcy. I do every time I think it is an alternative
for the client.
Please click here to see my webpage: What About Credit Counseling?
Please click here to see my webpage: What Is The Difference Between Bankruptcy Credit Counseling and Regular Credit Counseling?
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