Interview: What to ask a Bankruptcy
Attorney *BEFORE* hiring them
Category: Business &
Finance
Name: Michael Estrin
Media Outlet/Publication: Bankrate
Query: With bankruptcies on the rise, we're looking for
good advice on what to ask a bankruptcy lawyer BEFORE
hiring them.
Experts should have at least 10 years experience
representing clients for personal bankruptcy cases. They
should be able to offer insightful questions for people
to ask and tips on what to look for when hiring a
bankruptcy lawyer."
Michael -
I'm responding to your posting about bankruptcy.
I am an attorney that's been involved with bankruptcies
since the early 90's. My wife, Molly Bartholow, has been
a bankruptcy lawyer since the 1970's. She started with
the Akin Gump firm in Dallas when it was quite small
(now it's a major Washington-based national firm) and
has practiced solo or in small firms since the 1980's.
She was a Chapter 7 trustee from the 70's throught the
90's. She was a Chapter 13 Trustee for Dallas for 5
years in the 90's. I was her "general counsel" while she
was Chapter 13 trustee and we handled over 10,000 active
cases and a staff of about 40 people. Now we are a "mom
and pop" firm. We do consumer bankruptcies and small
business cases.
I would tell someone shopping for a bankruptcy attorney
to stay away from the bankruptcy "mills." Firms that
handle a high volume of bankruptcies rely on paralegals
and are focused on efficiency instead of client service.
For many of these firms, the attitude is that they lose
money if a client has a problem that requires them to
pay special attention, and they won't do it. Many cases
are "routine" but you never know when a problem will
come up the client needs an attorney that is ready and
willing to go to court to fight for his or her rights.
Many firms won't do this.
I would also tell them that it's important to spend
enough time with the attorney (not a staff person,
paralegal or legal assistant that will be handling the
case be comfortable on a personal basis that the
attorney (not a staff person, paralegal or legal
assistant) understands their situation and is ready and
willing to go to bat for them. If they don't have a good
feel for their relationship with the attorney, they
should go elsewhere and not be shy about it. Filing a
bankruptcy is an emotional matter for most people and
it's important that they feel right about what they are
doing and who is doing it for them.
Another message that needs to be communicated to
potential clients would be to dispel the "myths" about
bankrutcy. The 2 that most concern people is that they
will lose some or all of their property and/or that
their credit will be ruined forever.
In fact, most "consumer" bankruptcy debtors will get to
keep all of their property. This depends in part on what
"exemptions" are available under state law. In Texas , a
good state to be a debtor in, a debtor can keep up to
$136,000 (unlimited if they have lived in it for more
than 4 years) of equity in their home plus up to $60,000
of "stuff" ($30,000 for a single person) - including
their cars, clothes, furniture, appliances, jewelry,
electronics, etc. 401K's and retirement plans are also
exempt and can't be touched.
The second myth is that a debtor's credit is ruined
forever. In fact, a bankruptcy is the best way I know of
for many people to improve their credit: after a
bankrupcy, the discharged debts cannot be reported on a
credit report and a person's debt ratios, etc improve
greatly. It has been documented that people with low
scores can improve them by, sometimes, 50-150 points
within a year after the bankruptcy is over, and that
approximataely 97% of people who file bankruptcy are
offered credit within a year after the bankrupcty. On a
number of occasions, I am aware of people whose credit
scores are in the 700's within a couple of years after a
bankrupcy. Also, a very high number of our clients
receive aggessive solicitations for new credit shortly
after filing the bankruptcy. At first, this doesn't seem
to make sense, but when you realize that the credit
score is the measure of a lender's risk of non payment
on new credit you can understand that a person who has
gone through a bankruptcy and removed their debts from
the credit report is a much better risk after the
bankruptcy.
The third most common myth is that the 2005 changes in
the law make it impossible for someone to file
bankruptcy now. This is simply not the case. It has been
documented that for a very high percentage of situations
(I believe, but am not certain, over 90%), the new law
does not affect someone's ability to file a bankruptcy.
There's a little more paperwork, but that's only a
nuisance and what'd required now by law is not much
different from what a good attorney would request
anyway.
I hope this is helpful.
Feel free to call if you have any questions.
Toby Bartholow
Bartholow & Bartholow
BBBankrupcty.com
972-739-5255 |