Bankruptcy Attorney
Most debtors who file for bankruptcy do not have much money to spare for an expensive attorney. As a result, many individuals wonder how bankruptcy attorneys get paid. In most cases, how a bankruptcy attorney is paid depends on whether you're filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy. Each has their own payment methods.
Most people think that once they file for bankruptcy, they do not owe anything to any creditors. This is untrue. Once you declare bankruptcy, you may not receive any payments from your debts. However, most bankruptcy attorneys actually receive a percentage of the recovery money that you receive after declaring bankruptcy, and most are paid on a percentage basis, which means that the more successful you are at recovering, the more they are paid.
A bankruptcy attorney can recover a portion of your debt based upon a few different factors. First, they will assess how much of your unsecured debt was actually unsecured, and how much of it was secured. Most of the unsecured debt was due to credit cards, personal loans, store balances, and car payments. The portion of the debt that was secured usually consisted of home equity loans, auto loans, and consumer credit lines. The less secured the loan, the less you'll recover. This is one reason that the amount that your creditors are willing to accept is very small; even though they are not receiving any money from you, it is less than they would receive if you were to file a liquidation claim.
Your bankruptcy attorney may also consider how much debt you currently owe versus how much you have saved. If you owe more than nine hundred dollars, your attorney will most likely recommend that you file chapter seven bankruptcy. Chapter seven requires that you negotiate with your creditors and sell a part of your business or personal assets in order to repay what you owe. You will be required to pay this amount off within a ten year time frame, but your bankruptcy attorney may also be able to secure a one or two year extension.
During your bankruptcy attorney meeting with your CPA, you will be asked many questions regarding your financial situation. Your bankruptcy lawyer will ask about your monthly income, your expenses, and other pertinent information. He/she will then conduct an evaluation of your current debt load and your ability to pay it down. The purpose of this evaluation is for your attorney to determine if you qualify for a debt management plan (DMP), which many people do when filing their bankruptcy case. The DMP allows you to negotiate with your creditors for lower interest rates on your past due accounts, as well as reduce the amount of interest you owe altogether. Your attorney will work with your creditors to reach these goals and will be responsible for following through with them in order to ensure that everything is completed on time.
Once the meeting ends, you will have the opportunity to discuss what you have learned during the session with your bankruptcy lawyer. If you feel that there is more that you need to know, he/she will most likely be happy to continue your research until you are satisfied with what you have learned. It is important to keep in mind that most bankruptcy cases end in bankruptcy. There are a limited number of lawyers who specialize in dealing with such cases, and you will want to find one who has experience in your type of filing. Although you can file for Chapter Seven all by yourself, doing so is not recommended. Bankruptcy lawyers have the knowledge and expertise needed to navigate the ever-changing laws surrounding personal bankruptcy.