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General
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SO WHY DO YOU
NEED AN ATTORNEY? Some paralegal services charge a minimal fee to prepare and file the necessary paperwork to file a bankruptcy. While in some cases this may not be a major problem, it has been my personal experience that the risk is simply not worth it. Much of what goes into the bankruptcy petition comes from insightful and probing questioning from a qualified bankruptcy attorney. Paralegals and other "bankruptcy petition preparers" are strictly prohibited from practicing law and, therefore, cannot give legal advice or ask the necessary questions to make sure you are completing your paperwork fully and completely. Even if they were legally allowed to do so, they are not able to adequately assess the laws surrounding exemptions and to determine what your best options are. For example, you may assume there is no problem with listing a particular asset, or reaffirming a particular debt, only to find out months or even years from now, that because you filed the bankruptcy or didn't take appropriate steps, that you did not get rid of that debt, or that you may lose an asset, or any number of other problems. Perhaps most importantly, paralegals cannot represent you in court if the need should arise (and it often does when paralegals handle things) nor are they liable to you if they screw up. Moreover, if you list things incorrectly in your petition, or omit necessary items, it is YOUR problem, not the paralegal's. You sign all your bankruptcy papers under penalty of perjury. Many times I have watched a bankruptcy debtor in front of a judge, facing the complete denial of their discharge, pleading with the judge to help them because they didn't have an attorney representing them. Ultimately, the debtor may have to spend several thousand dollars to attempt to remedy a situation that could have been prevented, or at least planned for, at the beginning. A PRIME EXAMPLE: I just got a call today from a lady who had filed a Chapter 7 through a paralegal. After the Trustee reviewed her papers he noticed that her automobile had some $10,000 of equity available which she had failed to exempt. Therefore, he is seeking to sell the car. She then had the paralegal prepare some sort of Motion to Dismiss the case (which I can almost assure will NOT be granted) so that the debtor can keep her car and work out payment arrangements with her creditors. My advice was that she should have filed a Chapter 13 to begin with (considering all her assets and other relevant factors) but unfortunately, in an effort to make the Chapter 7 look better, the paralegal had her artificially increase her expenses to show that she has no disposable income, which made it impossible to fund a Chapter 13 plan (see information on Chapter 13). Therefore, in order to succeed in a Chapter 13 and make payments she would basically have to admit to perjury on her original schedules filed with her bankruptcy. The bottom line is that she is likely going to lose her car. There are, I'm sure, other problems in her case that haven't even surfaced yet, but this is a prime example of the problems I hear about almost daily with people that don't do things correctly at the beginning. And now, it's simply too late; there was nothing I could do for her at this point. The horribly bad advice and pre-planning done by the paralegal has left her with no viable options. So she saved a few hundred dollars by using the paralegal and now risks losing a car worth $19,000 or perhaps worse, losing her whole bankruptcy discharge (meaning the creditors who were garnishing her wages before she filed will be able to reinstate the garnishment). Enough said? Bankruptcy is a very important decision. It is basically the first step towards your entire financial future. The entire bankruptcy system is designed so that attorneys represent all parties involved. That is what we are trained to do. Do you want to trust this future to a non-licensed non-professional? This is the time that you should do things correctly. Don't skimp and save at this point. Hire the most competent attorney that you can afford and take the first step towards your fresh start.
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