NJ Bankruptcy Attorneys Helping Good People Through Hard Times

3 Secret Ways to Choose a Good Bankruptcy Lawyer

First of all, choose a Bankruptcy lawyer who you feel comfortable with.

You should be comfortable with your attorney who should first listen to you and understand your situation. The lawyer should call you back fast and talk to you in person, they remember your name, and they show sincere dedication to your case. It’s okay to trust your gut instinct on this one, because choosing a Bankruptcy attorney who you don’t feel comfortable with can often be a mistake. In most cases, a solo Bankruptcy attorneys or small firms can be your best bet.  A smaller family owned and operated legal firm will sometimes provide the most personalized attention to your case.

Look to avoid a huge bankruptcy “mill” type firm where they may pay little attention to your case. The large volume bankruptcy firms many times send an inexperienced new associate to your hearing and have less qualified staff do most of the paperwork. In these firms, the experienced guy usually screens your case, gives some valuable advice, but then does not do much else. Watch out for the slick upfront sales guy who signs you up as a new client and then does little work on your case.

Please note that you must also be completely open and honest with your Bankruptcy attorney.

Yes, experience is important too!

When trusting a Bankruptcy with your financial future, comfort is only one part of the equation.

Try to get a referral from a friend or family if possible. However, it is not always common to get referrals to Bankruptcy attorneys from friends, family, or neighbors because most debtors try to keep their situation as private as possible. So when you do shop around for a lawyer, be sure to ask about their success rates and how many years they have been working with Bankruptcy. You should look for someone who dedicates much time on bankruptcy, though not necessarily only bankruptcy. If the firm only handles bankruptcy, they might be a high volume mill or charge much higher fees, as this is their only source of income. They also might not be well rounded in other areas of law that are sometimes pertinent to bankruptcy, such as family law.. To start, consider whether the lawyer has seen cases like yours before, does he regularly deal with the local trustees, and how long has he been filing bankruptcy cases.

What about the cost of a Bankruptcy attorney?

Ah yes, cost is an issue to be taken into consideration. Especially when you are trying to get away from debt, the last thing you want is to hire a lawyer whom you can’t afford. Good news! Most Bankruptcy attorneys– the reliable and  trustworthy lawyers will work with you. Surprisingly, bankruptcy fees are very affordable, compared to the alternatives of running from debt or making never-ending minimum monthly payments to a credit card company. In a Chapter 13 Bankruptcy, part of your legal fees can be included in the monthly payment plan… so please keep these things in mind and choose wisely! Be careful to understand the filing fees and extra costs such as credit reports and mandatory credit counseling. Extremely important are extra fees the attorney might charge later on in the case if something goes wrong or for things that are not considered “included” within the normal representation.

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9 Insider Tips for Filing Bankruptcy

Here are some things to consider if you are planning on filing bankruptcy:

1. Stop using your credit cards immediately.

No, not immediately… about 6 months ago! You’d think it common sense to put away those cards if you’re thinking of filing Bankruptcy, right? Charges and cash advances made within 90 days of the bankruptcy filing are particularly scrutinized in bankruptcy. It is advisable to stop using credit as soon as bankruptcy is considered. The law assumes that a financially responsible individual will know when to stop spending money that isn’t there, especially when Bankruptcy is something you’ve been thinking about. So, if you’re having financial problems… stop using your credit cards!

2. Get organized!!

You’ll want to speak with a Bankruptcy attorney as soon as possible, and they can offer advice in regards to what specific information is needed for you to proceed. But even before you contact your Bankruptcy attorney, it should be fairly obvious that your financial information is important… with verifiable documents to prove the amount of debt you’re facing, as well as the amount of income you have. Other assets will also be factored in as well, but the bottom line is that organization is essential to expedite the process of filing Bankruptcy, and to avoid delays. Your attorney will review your budget with you to determine if you have any “disposable” or leftover income to pay creditors. Most bankruptcy attorneys will look at 6 months of paystubs and/or other income, recent bank statements, mortgage and auto loans, and the bills, to name just a few important items.

3. Do research about Bankruptcy and other options.

The more you know and understand about Bankruptcy, the less frustrating the entire process will be. Your Bankruptcy attorney can answer any questions that you might have, but doing some research ahead of time is always helpful. www.Bankruptcyaction.com is one valuable sight to check out. (You’ve found a good resource for Bankruptcy information right here, so be sure to bookmark this site and check out our law firm page at www.Reinherzlaw.com !)

4. Hire a Bankruptcy lawyer that you feel comfortable with.

No, you don’t have to move in with your Bankruptcy attorney. You don’t even have to invite him over for dinner. But you do have to feel that he, or she, is a person you can trust with your situation. When choosing an attorney, you have to have a good sense of character and trust your intuition. In most cases, solo attorneys, small firms, or the family owned and operated firms are where you can find a reliable, trustworthy Bankruptcy attorney. Make sure the lawyer you are dealing with is the one attending the Court hearing with you, as many bigger firms send a new associate to do their “grunt” work. If you can find an attorney who actually prepares the bankruptcy paperwork and reviews the drafts of it with you throughout the process, you will be in the best shape.

5. Be honest with the lawyer.

Please read the last tip about finding an attorney you can trust. It goes both ways. As the debtor, you must be entirely honest throughout the process of filing Bankruptcy. Did you know that an individual who hides assets or lies on paperwork can face criminal charges and prosecution?

6.Be prepared when you meet your lawyer.

Refer to the tip on getting organized. When you first speak with your Bankruptcy attorney on the phone, they will let you know what information they need. You should already have as much of that information and related documents as possible. If you make your appointment on time and have done a lot of the preparation already, the attorney is likely to help you more easily and possible be more generous when dealing with the fee.

7. Be reachable, so your lawyer can contact you.

You wouldn’t want the process of filing Bankruptcy to be delayed, or even stopped, due to communication problems! Debtor cooperation can sometimes be a big problem for bankruptcy attorneys and the court. If problems arise regarding payments or paperwork, please keep your attorney notified and updated. Your attorney should have a process to deal with current creditor harassment, so dodging the creditor will no longer be a problem.

8. Keep a record of any creditors that contact you.

This is another part of getting organized that can greatly simplify the process of filing for Bankruptcy. Keep good records of all debts owed: for good practice as you rebuild your credit, to be prepared for your meeting with a Bankruptcy attorney, and for a verifiable overview of where you stand. Creditor harassment is also important to keep track of since you might have a cause of action against the creditors. Another words, you can sometimes actually sue the Bill Collectors if they violate consumer protection laws.

9. Enjoy your fresh start and be responsible with future credit.

Bankruptcy should not be looked at as a ‘Get Out Of Jail Free’ card. Instead, it should be viewed as a second chance. You’ll be given a fresh start to build a brighter future with the lessons learned. Take advantage of the brief credit counseling and debtor education classes that are now required in bankruptcy to educate yourself about finance and take steps to learn to rebuild credit after bankruptcy.

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Based on some of the following misconceptions about Bankrupty, people often times struggle for much longer than is necessary before seeking bankruptcy relief. Many of my clients would have done much better had they met with me much sooner, protecting more of their assets ahead of time. So meet with a bankruptcy attorney as soon as possible if you are unable to pay your bills, especially if some of the following fears are holding you back:

“If You File Bankruptcy, You’ll Destroy Your Credit.”

Your credit report is used by lenders to determine whether or not you are a risk. Those with unpaid debts are a high risk, and having bad credit can stop you from qualifying for a mortgage, credit card, car loan, etc. Filing bankruptcy is a responsible decision to face debt that you can’t afford to pay… to do something about your credit. Whether you qualify to wipe the slate clean with a Chapter 7 Bankruptcy, or to make payments against debt with a Chapter 13 Bankruptcy, your credit will be repaired– not destroyed!

“Filing Bankruptcy Will Make You a Bad Person.”

This myth is often unspoken… a general negative feeling about filing Bankruptcy. In reality, it is a positive and moral decision to face responsibility. While the creditors would like you to believe differently, filing Bankruptcy does not make you a bad person! Believe it or not, bankruptcy itself even has biblical roots. Financial difficulties and debt relief have been around since ancient times.

“But I Will Lose My House or Car if I File Bankruptcy, Won’t I?”

In most cases, individuals or families filing Bankruptcy are entitled to keep their property when filing Bankruptcy. The law provides for generous exemptions of equity in various types of properties, including a house and car. It’s highly recommended to consult with a Bankruptcy attorney who can evaluate your unique circumstances, but filing Bankruptcy will stop foreclosure or a repossession of a vehicle, and give you the chance to make things right without losing your property.

“My Neighbors Will Find Out if I File Bankruptcy…”

Not unless you tell them! Those who have believed the lies about Bankruptcy, or wrongly feel that it is immoral, tend to visualize that Bankruptcy will include getting a neon tattoo on your forehead. It is a process that you do not need to share with friends, coworkers, or neighbors. Although it is a public record, it is only found by those specifically looking for that information.

Similarly, many people are concerned that their boss will find out if they file Bankruptcy, and this might affect their work credibility. Again, your boss will not find out, but Bankruptcy should be viewed as something to improve credibility– not hurt it.

“I Can’t Afford to File Bankruptcy, It’s Too Expensive.”

Bankruptcy is not as expensive as many people think and many lawyers will even offer a customized payment plan. Being in debt is a very stressful situation, but it doesn’t go away on it’s own. The longer it lasts, the deeper you will drown and the financial stress can take over your life.

If you’ve been making the minimum monthly payments to credit card companies, for example, those payments do almost nothing to reduce the total balance because of interest. It’s like trying to dig yourself out of a hole, using a spoon. The fees associated with Bankruptcy can often be less than the minimum monthly payments made against debts, so it just makes perfect sense.

When you file Bankruptcy, even your legal fees can be set up on an affordable payment plan. You’ll be taking back control of your situation, and your life. So the real question is, can you afford not to file Bankruptcy?

“It’s Too Hard to Qualify for Bankruptcy”

Yes, and no. Credit card companies and lenders do their part to make it challenging for a consumer to escape the prison of debt, because this is how they profit. So it may be challenging to qualify for Bankruptcy, but it’s not as hard as most people think. The only way to find out if you qualify is to take action and consult with a Bankruptcy attorney who can evaluate your unique circumstances and provide experienced guidance in regards to your options.

“It’s Easy to File Bankruptcy”

To file bankruptcy, you will need to get organized, cooperate with your attorney, and provide various financial documents to the lawyer. You may feel like you have to jump through hoops from time to time, but ultimately the entire process of filing Bankruptcy is built to create a more financially secure and responsible future. When you consult with a Bankruptcy attorney, they will explain the process which best fits your specific circumstances. You will need to do a pre-bankruptcy and post-bankruptcy financial management course.

So it is not too hard to file Bankruptcy, but it is not too easy either. As long as you are honest, and work with a Bankruptcy attorney you can trust, then it will be okay.

“Won’t It Destroy My Future to File Bankruptcy?”

Yet again, this misconception is a terrible lie, closely associated with the moral misconception that filing Bankruptcy is irresponsible. On the contrary, Bankruptcy is a financially and morally responsible decision to face your problems and do something about it!

So when all is said and done, Bankruptcy will not destroy your future at all… it will pave the way for a brighter, and better future. You’ll be given a fresh start, and it’s up to you what you choose to do with it!

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There are certain issues to watch out for that can sometimes cause problems in bankruptcy.

Tax Issues…

UNFILED tax returns will cause problems in bankruptcy. In fact, you do not qualify to file Bankruptcy if you haven’t filed tax returns that you were supposed to file. You will usually have to provide your lawyer with the last 2-3 years of your tax returns before filing bankruptcy. If there are unfiled tax returns outstanding when bankruptcy is filed, the law specifically requires you to file all overdue tax returns within one week prior to your Bankruptcy hearing.

In many cases, taxes will not be discharged or wiped out by a Chapter 7 Bankruptcy, although there are some exceptions (such as if taxes are more than 3 years old and were filed in a timely manner) but it is advisable to compose a repayment plan with the IRS or local tax authorities before filing a Chapter 7 Bankruptcy.

In a Chapter 13 Bankruptcy, taxes that do not qualify as an unsecured dischargeable debt are required to be paid in full in the monthly payment plan. This can make the payments much higher.

Student Loans & Bankruptcy

Much like taxes, student loans are generally not dischargeable in a Bankruptcy. However, there is a slight exception for hardship… but this exception is very difficult to qualify for and will require a separate lawsuit within your bankruptcy case.  Due to debt limits, student loans could also disqualify you from certain types of Bankruptcy and make a Chapter 13 payback Plan harder to fund.

Child Support & Bankruptcy

Child support payments, or child support arrears, are another debt that is not eligible for discharge in a Bankruptcy. In fact, the most recent revision to the bankruptcy laws require the trustee to carefully check into any domestic support obligations and provide contact information to the recipient. The Chapter 13 discharge will require that post-petition domestic support obligations are current.

‘Funny Business’

If you have transferred assets, taken recent cash advances, or ran up credit cards in anticipation of filing bankruptcy… you may have problems receiving bankruptcy relief. If the trustee or court believes that you have lied or hidden assets, you will be liable for your debts and your discharge may be denied. In the worst cases, those who hide assets or lie on paperwork will face serious criminal penalties and prosecution.

Self Employment & Bankruptcy

It’s not that owning your own business makes you ineligible for Bankruptcy, but it can sometimes make for a harder case. Without solid records of income, self employment can be problematic in bankruptcy. Additional paperwork such as a profit and loss statement, expanded information within the Statement of Financial Affairs, and a business questionnaire are required for self employed debtors wishing to file Bankruptcy. Although many times they are hard to value, the business ownership itself may also be considered an asset of value, which can cause problems in qualifying for bankruptcy.

Bankruptcy & Inheritance or Personal Injury Cases

These are a favorite of most trustees to ask about. Perhaps some money the trustee can get their hands on to pay back the creditors and make the case more profitable. You must disclose these situations, as not disclosing can leave you in even worse shape. Your lawyer will determine how much of these assets can be protected by the bankruptcy exemptions.

Large Payments to Creditors Before Filing Bankruptcy

Believe it or not, it can hurt you to make a large payment to an individual creditor before filing Bankruptcy. This is known as a preferential payment, or Preference, because if you make a large payment to one creditor– especially if it is an insider such as a relative or friend– you are showing preference of one creditor over others.

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