Interviewer: Do you think it is important for someone filing bankruptcy to hire an attorney? Why?
Marilyn Minger: Well, I do. I think there are several good reasons to hire an attorney, other than the obvious, to assist you with your bankruptcy. First of all, bankruptcy law is complex. It never hurts to have an experienced professional on your side, identifying the pitfalls and benefits of your particular circumstances. I find as an attorney, while I don’t always know the answers to all the questions, I usually know the questions to ask. Another good reason to hire an attorney is to make sure that the petition, schedules and statement of financial affairs are properly completed. Having the experience of having completed many bankruptcy petitions, I have a sense when something doesn’t look right, or doesn’t make sense. I can explore these issues with the debtor before the petition is filed, rather than having them pointed out by the trustee or a creditor in the meeting of creditors. Another reason to hire an attorney is to have assurance throughout the process, including at the meeting of creditors. My clients generally are very happy to have an attorney go with them to the meeting of creditors.
Also, the automatic stay prohibits creditors from contacting the debtor except through their attorney. A debtor may not have this buffer from creditors when they file without an attorney.
Another value I bring to my clients in a bankruptcy is the experience I have with respect to their stated expenses. Many people don’t have a real handle on how much they actually spend on different items each month. Understating expenses in a bankruptcy can have a serious impact on the debtor’s outcome.
Interviewer: How can a bankruptcy client pay for legal services when the whole idea is that they don’t have the money to pay their debts?
Marilyn Minger: There are several ways that debtors are able to pay their attorneys fees. Often debtors are still making payments on credit cards at the time they decide to file. Once a decision has been made to file, two things should happen: (1) no more payments should made on dischargeable unsecured debt and (2) no more dischargeable debt should be incurred. The payments that were going to the credit cards can be a source from which to pay attorneys fees. In a chapter 7 the attorney must collect her fees prior to filing the petition, otherwise the fees become another unsecured debt and are dischargeable in the bankruptcy. They way I like to collect fees in a chapter 7 are: one-half of my fee when the client returns the completed questionnaire to me and the other half and the filing fee when the petition is reviewed and signed the day before filing. This can give the filer time to accumulate the fees. In a chapter 13 the court allows me to charge up to $2000 of my fee before filing, and the balance is paid through the five-year plan. Also I often find there are generous family members willing to give a debtor the filing fee to help them get into a position where the debtor’s income can again support them.
We are a debt relief agency helping people file for bankruptcy relief under the Bankruptcy Code.