Hiring an Experienced Denver Bankruptcy Lawyer: What to Look For

August 18, 2010

By: David M. Serafin

When looking for a Denver bankruptcy lawyer or a lawyer anywhere in Colorado, many prospective clients believe that they’re hiring somebody primarily to complete the forms and schedules. If this was the case, all you would need is a petition preparer who may charge as little as $200. A lawyer costs more because you’re really paying for that lawyer’s expertise and ability to effectively navigate the bankruptcy process.

Case in point: I recently took over a chapter 13 matter on behalf of a client who had originally hired a petition preparer for cheap. About half of the schedules were incorrect (remember that the bankruptcy documents are signed under penalty of perjury) and there was never a chapter 13 plan submitted to the Bankruptcy Court. (Since I took over, the case has been going very smoothly for my client.) In this case and every chapter 13 cast, the plan determines what a client’s monthly payment plan will be for 36 to 60 months, and such plan can only be properly submitted and later confirmed by a knowledgeable bankruptcy lawyer. So, it’s the expertise you’re paying for, not the routine petition preparing process.

Specifically, some of the reasons you want to hire a lawyer (but not a discount bankruptcy lawyer) include the following reasons:

1. WHEN the case is filed. The timing of the filing for bankruptcy can help or hurt a given client’s case. For instance, a petition may have been filed too late if filed months after the client found a much higher paying job. On the other hand, if the client has incurred significant credit card charges for non-luxury related items, waiting a few weeks (and making some monthly credit card payments in the interim) may give the bankruptcy trustee or an unsecured creditor less ammunition to object to discharge.
2. What bankruptcy exemptions are available? The state exemption laws in Colorado determine what property a debtor can keep (versus non-exempt property that the trustee can seize for the benefit of creditors). Any non-exempt property (or the monetary value of such property) will likely be required to be surrendered to the trustee in a chapter 7.
3. Do I pass the Means Test? The Means Test is comprised of a rather complicated formula to determine any disposable income you’re required to pay back to unsecured creditors, such as for credit cards, payday loans or medical bills. Your lawyer will be able to calculate your gross income versus your allowed deductions or expenses (as compared to family size) in order to determine whether you qualify for chapter 7. If you do not qualify for chapter 7 bankruptcy (e.g. if you fail the Means Test), this calculation can determine what your monthly chapter 13 plan payment will be.
4. Preventing any surprises. Surprises, in many life contexts, can be pleasant but such can often create unexpected obstacles with regard to the bankruptcy process. An example involves a situation where the United States Trustee files a Motion to Dismiss your case or if the matter needs to be converted from a chapter 7 to a chapter 13 bankruptcy, or vice versa.
5. Hiring a bankruptcy lawyer who will stand by you. It’s no accident that my business card states that I’m an attorney and counselor at law. Having represented thousands of clients in debt and who are in dire financial straights, I see my job as reassuring my clients that things will be ok throughout the entire bankruptcy process with me by their side.