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Your problems:
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 balanced advice.
Why hire a lawyer? Well first of all, I am a lawyer so what else is a lawyer going to say but you
should hire a lawyer! I believe there are many advantages of seeing a good lawyer.
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. My recommendation isn't
always 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 the NEW bankruptcy law. 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.
It is illegal for non-lawyers to give legal advice. 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. The new bankruptcy law actually requires that
I tell you that you don't need to hire a lawyer, and that you can file yourself or hire a petition preparer, but I never
recommend that someone use one of these services. There is just too much that can go wrong without an experienced eye
to prepare the case.
Above all else, you want to know the truth. 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 case);
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 cases filed in 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 foreclosure hasn't happened yet, you should speak to a bankruptcy attorney
as soon as possible to see if she/he can help you);
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 them.
This is why they don't really worry about how they do business. After all, what are you going to do to them?
Sadly, I see a lot a people who either file bankruptcy for themselves incorrectly, or get
some "help" doing so and when they come to me to try to fix the situation, I either have to charge more to fix it than had
I filed the case to begin with, or I can't fix the problem at all anymore. I have seen people 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 or the actions they took weren't the right legal actions.
Please see the Rumors and Problems page on this website for some things I have seen or heard, many are from my own law practice
and my clients.
Read an article on BankruptcyLawNetwork.com:
"Bankruptcy Law On The Internet" by Cathy Moran, a leading California bankruptcy attorney.
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
written law.
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
Under the new law, credit counseling (a financial management course) is required before you file, but you
can't just go to any counselor. Under the new law, you will be required to go to a Bankruptcy Court Approved Counselor
for a special bankruptcy course, not just any credit counseling agency. A few agencies have been approved now
for the Western District of North Carolina, and in other parts of the country. Official Approved Credit Counseling Agencies - UST Website for all states and divisions .
The cost is usually less than $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.
You will also have to take a second course after filing, the debtor
education course.
I recommend 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 . (They also offer the lowest prices that I know of for both
bankruptcy courses.)
You can speak to a bankruptcy attorney first about your financial situation,
and they will make sure you go through your Bankruptcy Counseling Course and receive your certificate if bankruptcy is the
right option for you. I do not recommend bankruptcy if I know credit counseling is a better choice for the client and
I don't hesitate to tell the client that. Any good bankruptcy attorney can normally recommend a reputable credit
counseling agency when appropriate, and normally will if they think it is a better alternative for the client.
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