First step of Bankruptcy, Free Initial Consultation
Bankruptcy stages start from initial consultation and end at post-discharge issues. The first step should be the free initial consultation with a bankruptcy attorney.
Bankruptcy is a difficult choice for clients. Often the client has been unwilling to file bankruptcy for months or sometimes years. The reasons I see are many. Some are feeling ashamed believing that filing for bankruptcy is an admission of failure. Some are overwhelmed with the debt and simply do not want to deal with it. Sometimes clients are misinformed and believe that they either do not qualify or does not apply to their circumstances.
Sometimes I get clients who have tried or are trying to deal with creditors but are realizing that despite their best efforts, their financial circumstances are not improving. They are very discouraged for many reasons. Sometimes the creditor does not care and asks for much more that the client can afford. Sometimes the potential clients are making some payments but the interest rate is so high that the balance just keeps going up or will never be paid down. Sometimes the potential client has been working with a “debt consolidation company” only to discovery that the first 18 payments of a 60 month plan that was proposed to them, was going to pay the debt consolidator’s fees. And none of the payments have been going to any creditor and now they are being sued.
In my practice since 1997, I have never had a client who was just eager to file bankruptcy. I do not blame them that is the way its supposed to be. But when they do pickup the phone and call for help from an attorney, I applaud them for finally seeking legal and credible information to deal with their financial difficulties. Whether they ultimately decide to file bankruptcy or not is not important. What is important is that the client get the correct information about their particular circumstances and make an informed decision.
The first step in seeking knowledge and solutions about your financial difficulties is to meet with a bankruptcy attorney, not a paralegal, and not an an attorney who does everything else including bankruptcy. I have heard so many times from clients that come to my office telling me that they meet with a paralegal or an attorney who told the client, “they can file bankruptcy”. I tell them great, and continue with asking all the questions that I need to ask to familiarize myself with the financial situation of the potential client.
When I am done with my questions, the client is left wondering why the paralegal did not ask all these questions? how did the paralegal know if bankruptcy is the right choice? which chapter? what are the consequences? When the client voices their concerns about the paralegal. I tell them, “The paralegal told you they (the paralegal) can file bankruptcy” that is they can fill the forms and upload the petition to the court. The paralegal did not tell you bankruptcy is the right choice for you or that you, the client, should file bankruptcy.
Your first meeting with a bankruptcy attorney should be detailed as much as possible. It should be free of charge and It should be in person with the attorney himself who will be handling the case from beginning to the end. This meeting is as much as for the client to get to know the attorney as it is for the attorney to find the facts and circumstances of the client. After the initial questions, I explain what bankruptcy is, the different chapters, the process, my recommendation, the cost and give you the opportunity to ask any questions you want.
A bankruptcy attorney should be able to advise you whether bankruptcy is the right choice for you. Whether you qualify for chapter 7 bankruptcy or you must file a chapter 13 bankruptcy or you are better off negotiating your debts. Whether the timing is right, or if waiting couple of months may put you at a better advantage. What of your assets will be protected. What will be at risk. The answers to these questions are highly dependent on the exact circumstances of your particular circumstances.
At the end of the meeting, I will thank you for meeting with me, and I will ask you to go home and think about it or discuss it with you spouse. You should never be pressured to file bankruptcy by anybody.
Roland Kedikian is a Los Angeles bankruptcy attorney, providing bankruptcy solutions to debtors since 1997.