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Saturday, January 5, 2013

How to Start the Bankruptcy Process


How to Start the Bankruptcy Process

Initiation And Consultation

Take the Initiative
You have hit rock bottom. You cannot meet your monthly payment obligations and you are falling behind on your bills. You are starting to receive harassing phone calls threatening legal action. Even worse, you are in foreclosure, there is a lien on your bank account and/or your wages are being garnished. It is extremely important that you do not sit idle and bury your head in the sand.
I know it can be very difficult, but the first step is realizing that you have a financial problem that you cannot fix. It takes courage, but you must take action. Hopefully this is done early before things get out of control or before you liquidate exempt assets in an attempt to stay above water.
It is important that you consult with a bankruptcy lawyer before making any drastic financial decisions.
The Selection Process
So, while this is an extremely difficult time in your life and you don’t know where to turn, choosing the right bankruptcy lawyer could make all the difference.  Make sure you do your research, read their blog and meet for a free consultation.  Hire the lawyer you feel most comfortable with who respects you and your situation and treats you with the dignity that you deserve.
The Consultation
The initial consultation is perhaps the most important part of the bankruptcy process. It is the jumping off point to future financial freedom. So, if a lawyer does not offer an initial, free consultation, do not hire that lawyer. This initial consultation is an important meeting where you get to interview the lawyer and the lawyer gets to interview you. Invaluable information is passed back and forth at the initial consultation.
It is important to come prepared. Most lawyers will advise you on what needs to be brought to the initial consultation. Some will have you complete a pre-consultation intake form to provide them with necessary information. At a minimum, you should bring the following documents with you to the initial consultation:
  • Copies of your previous two (2) filed Income Tax Returns;
  • Copies of your pay advices (or proof of income) for the previous month;
  • Copies of your monthly bills (utility bills, credit card statements, mortgage statements, etc.);
  • Copies of bank statements for the previous two months; and
  • Any other relevant documentation.
You should always come organized and as prepared as possible.
It is important to be completely honest, cooperative and share everything. Remember that the attorney/client privilege applies to the initial consultation so all communications with your potential lawyer will be protected. Speak freely and disclose everything as one tiny detail omitted could impact the outcome of your case.
As the debtor, you play an active role in your bankruptcy case and just as you rely on your lawyer, your lawyer relies on you to communicate all information in a truthful and forthcoming manner.
It is also important that you ask questions and get as much information as you can. You should leave the initial consultation with a solid understanding of the bankruptcy process and whether you will be filing Chapter 7 or Chapter 13.
Finally, you should leave the consultation with a clear picture of what your bankruptcy filing will cost you. Some lawyers still bill by the hour and this creates confusion and uncertainty. Most bankruptcy lawyers today utilize flat billing fees where you are billed a set fee for your entire case. This is a clean, concise and easily understood billing model.
Remember, initiate and take action before it is too late and make the most of your consultation as it is the first affirmative step to getting out of debt and achieving future financial freedom.

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