Getting the relief you need through the federal bankruptcy laws starts long before you file your case. A successful bankruptcy begins with having an experienced attorney evaluate your financial situation. The evaluation process is a two way street: the client is expected to provide the attorney with all necessary financial documents to review, and answer questions; and the attorney is expected to provide answers and legal guidance during the bankruptcy process.
There are six important questions that every client should ask his or her bankruptcy attorney:
Question One: What chapter should I use?
There are two common bankruptcy chapters for individuals: Chapter 7 (liquidation) and Chapter 13 (repayment). Each chapter has its advantages and disadvantages and your attorney can fully explain the differences and benefits. You should only choose a bankruptcy chapter after exploring your legal options with your attorney, listening to his or her advice, and weighing your options.
Question Two: Will I lose any property?
This is perhaps the most common question asked by clients, but is also an extremely important one. An individual may lose property during a bankruptcy case for many reasons. In one case a person may voluntarily surrender an underwater house or car back to the lender and discharge the debt. In another case there may be non-exempt equity that puts the property at risk of turn-over to the Chapter 7 trustee. Property should never be lost unexpectedly during bankruptcy if there is a proper case evaluation and a frank discussion of the risks between the attorney and client.
Question Three: What debts will survive the bankruptcy case?
Bankruptcy does not discharge every debt. Some debts are excepted from discharge by law, such as child support and recent taxes. Other debts are nondischargeable unless certain conditions exist, such as student loans. Still other debts are not discharged if a creditor objects and the bankruptcy court excluded the debt from the discharge order, such as charges made on credit cards just before the bankruptcy filing. An experienced attorney can identify debts that may survive the bankruptcy discharge.
Question Four: Will the trustee or a creditor file an objection in my case?
No one can predict the future, but your bankruptcy attorney can tell you how likely it will be that a creditor or the bankruptcy trustee will file an objection in your case. Objections are filed for a multitude of reasons, but nearly always manifest themselves before filing bankruptcy when a proper case evaluation is conducted.
Don’t be afraid to ask your attorney questions! Your attorney is there to represent your interests and guide you through the bankruptcy process. Maintaining an open line of communication between attorney and client is critical to success during bankruptcy.