For the last 28 years, I’ve been drawing pictures and timelines to explain to my Chapter 7 bankruptcy clients how the process works. I finally decided to make a video and hope you find it helpful.
Your Duties to Disclose During Bankruptcy
A successful Chapter 7 bankruptcy requires honesty in order to work. When filing for bankruptcy in Rhode Island (or any state for that matter), honesty is not just necessary: it is mandatory. Anyone filing for bankruptcy should know that they are expected—required, rather—to act in good faith and be completely transparent with their RI bankruptcy attorney and Chapter 7 bankruptcy trustee.
There are three areas in particular where this “duty to disclose” comes into play for those filing for bankruptcy.
(1) Duty to Disclose Pre-Bankruptcy Asset Transfers
Imagine you own a number of expensive assets (real estate, valuable jewelry, multiple cars, perhaps a boat) but have created considerable debt in acquiring them. Scared that you may lose something, you secretly transfer these items to a close relative before filing for bankruptcy, with the intent of taking them back after your debt has been eliminated. This would be considered fraud under bankruptcy law and could be grounds for the denial of your debt discharge. For this reason, you are required to alert your attorney of any and all transfers of interest in the period before you filed for bankruptcy.
(2) Duty to Disclose Payments Made Before Your Bankruptcy
You may or may not have been advised to avoid repaying loans to family and friends prior to filing for bankruptcy. This is partially because of your “duty to disclose” pre-bankruptcy payments, since repaying loans from family and friends in this context can also be considered as fraudulent. In repaying old debts, you have chosen a lesser priority “creditor” over another higher-priority creditor, an action that can have serious repercussions in bankruptcy court. For this reason, any pre-bankruptcy payments beyond what bankruptcy court considers “essential” must be disclosed to one’s bankruptcy attorney.
(3) Duty to Disclose Any Lawsuits
Your “duty to disclose” extends to payments you expect to receive as well. If you are currently involved in a lawsuit from which you expect to receive some form of financial settlement or compensation, you have an obligation to alert your bankruptcy attorney of your situation.
Bankruptcy is a complicated business, so consulting a qualified bankruptcy attorney is an intelligent move for any person struggling with excessive debt. A good bankruptcy attorney can help you make sense of bankruptcy law’s complex procedures and make the most of a difficult financial situation. The Law Offices of Mark Buckley offer free debt consultation and are a good place to start when looking for financial direction.
A common emotion for most Chapter 7 bankruptcy filers is REGRET. Not regret for filing bankruptcy, but regret for not seeking legal help earlier for their financial struggles.
This may sound self-serving coming from someone who has helped more than 3,000 clients in Rhode Island file for bankruptcy relief, but ask anyone who has filed a Chapter 7 bankruptcy. Most debtors waste time and money on weak attempts to solve an unfixable mess.
Recently, I spoke to married client who hadn’t saved much for retirement. He sold his house a few years ago and put the $ 120,000 profit in the bank, hoping it would supplement the $ 40,000 kept in a 401k plan.
Over the years, he spent $ 80,000 of his precious savings and all of his 401k in order to pay substantial credit card debt. He still owes $ 37,000 and asked me if he could NOW file a Chapter 7 bankruptcy to discharge the remaining debt.
Under federal bankruptcy protection laws, he would have difficulty protecting his remaining $ 40,000 in the bank. Because the account is joint, he may be able to protect half, but the rest is fair game for the bankruptcy trustee to go after. Now in his 70’s, there is no way this retired man could afford to lose $ 20,000.
What went wrong? What should he have done?
If he had called me years ago, I would have explained how under Rhode Island law, he could have exempted all the equity in his modest home and still file bankruptcy to discharge his considerable credit card debt. I would have also explained how it almost never makes sense to liquidate qualified retirement assets to pay credit card obligations. Instead of taking a 10% penalty on the early withdrawal, paying income tax on the gain, and forfeiting the future growth of the account, he should have known that bankruptcy exemption laws are quite generous in protecting retirement assets.
In other words, he could have kept his house and retirement account and discharged all his credit card debt . . . with ease!
It is unfortunate that he spent most of his life savings on debt that could have been eliminated with a simple Chapter 7 bankruptcy filing.
Here is my point. You may never want to, or need to, file for bankruptcy relief. But you should talk with a skilled bankruptcy lawyer who can explain all of your debt options.
So, when do you know its time to seek help? Do you have more than $10,000 in unsecured debt, are you robbing Peter to pay Paul, are debt collectors calling you at home or at work? If so, something is seriously wrong.
Bottom line: You would be surprised what you could learn from sitting with a qualified bankruptcy attorney. A good bankruptcy lawyer can offer a free consultation and patiently explain all of your debt-relief options.
A percentage of callers always begin with that magic question: What do you charge for bankruptcy?
Price is always a fair question when it comes to hiring any professional. If I were paying a plumber to fix a toilet, or a dentist to pull a tooth, I want to know two things:
- is he experienced to do the job
- is his fee reasonable for my particular job
Sometimes you strike a good deal and sometimes you don’t. Hiring a bankruptcy lawyer is no different. Sit in on some Rhode Island bankruptcy court hearings in Providence for a day and you will quickly discover that good bankruptcy lawyers know what they are doing, but many “general practice” lawyers do not.
You will also determine which lawyers are running bankruptcy mills. I have seen some lawyers file 30 cases at once, miss filing deadlines and receive court sanctions for their poor representation. Don’t be fooled by the big billboards, the radio advertisements or their claims of filing more cases than any other firm. You should hire a lawyer who is respected by the court and the bankruptcy trustees; not someone who has a reputation of cutting corners and being unprepared.
So, back to the question of “price”. What do I charge for a Chapter 7 bankruptcy? It truly depends on what your case looks like. Its not like buying a gallon of gas where you just buy it from whoever is the cheapest. Bankruptcy is anything but a one-size-fits-all situation. Tell me your story first, we will explore all options, and if we are a good fit, I will quote you a price you can afford. (And yes, I do realize that if you had a lot of money, you wouldn’t be needing to call me. I get it.)
Filing for bankruptcy is a very complex process with specialized procedures tailored to your individual situation. Remember, your legal costs correspond to the complexity of your bankruptcy case. Fortunately, bankruptcy attorney fees are relatively inexpensive in comparison with the relief of having your debt cleared once and for all.
Another factor that will influence the amount of your bankruptcy attorney fee is the length of time your case will take to run its course. Generally speaking, a more complicated case will take longer for a bankruptcy lawyer to see through, resulting in higher prices than would be charged for a short, simple case. Easy cases should be done quickly and inexpensively. That is why I charge the lowest fee to a senior citizen, living on Social Security, with no real estate and only a few credit cards.
The costliness of your legal fees also depends on the size and volume of your assets and debts. In most cases, your legal bills will be lower the fewer assets, properties, cars, investments, and debts you have accrued. The Law Offices of Mark Buckley can provide an initial consultation to determine the value of your assets, and, consequently, determine the cost of your bankruptcy case.
Lastly, the amount of money you pay to file for bankruptcy is directly related to the type of bankruptcy you file under. When a client files bankruptcy under Chapter 13 of the US Bankruptcy Code, for example, his attorney can put the majority of his attorney fee in the Chapter 13 plan, a payment scheme that demands less money up front from the person filing.
As a RI bankruptcy lawyer practicing for 21 years, I have counseled thousands of good people struggling with bad debt problems. If you are getting collection calls, being sued for wage attachment, or just simply getting close to your breaking point, its time to call a professional.
Going to court is rarely fun. Financial and family court matters can be issues of serious stress and discomfort. Court cases are filled with uncertainty and conclude only after lengthy legal battles.
Thankfully, a Rhode Island Chapter 7 bankruptcy case is entirely different. In the vast majority of RI bankruptcy cases, debtors rarely enter a courtroom. Although your RI bankruptcy lawyer files your petition with the US Bankruptcy court in Providence, your case is reviewed by an attorney at the US Trustee’s office, meaning that your bankruptcy case does not need to be heard in a courtroom. No judge, jury, or bailiff will be necessary.
The room where I handle my RI bankruptcy creditor meetings is nothing like a courtroom, with only a few scattered tables and chairs. RI Chapter 7 bankruptcy meetings are almost always the same: no excitement, no drama, very predictable and uneventful. You will sit next to me and across from the bankruptcy trustee at a table with a tape recorder and computer. The bankruptcy trustee will typically hear your case within an allotted 5-minute time span. Only improperly-prepared petitions, or extrememly complicated bankruptcy cases, take longer.
One key to a stress-free Chapter 7 bankruptcy case is to find an experienced bankruptcy lawyer with attention to detail and who can do things right the first time. If this kind of lawyer prepares your petition, your hearing should be entirely uneventful.
If you hire a lawyer from a bankruptcy mill, however, be prepared for headaches.
The bankruptcy hearings take place at the Federal Center, 380 Westminster Street, 6th floor, room 620. You should arrive 30 minutes prior to your hearing and have with you a state issued identification card (driver’s license) and your Social Security card.