Taking the step to meet with an attorney for a free bankruptcy consultation is the first thing you should do on your road to getting your finances under control. Many lawyers provide a free bankruptcy consultation to help you decide what is right for you and your situation. The bankruptcy consultation is an opportunity for the attorney to evaluate your financial situation in detail in order to provide affordable solutions to your debt problems based on the attorney’s vast knowledge of bankruptcy law and his experience helping people solve their financial problems.
To make the most of your bankruptcy consultation, you should be prepared to answer questions such as what is your current household income, your monthly expenses, the types and amount of debt you owe, and the value of assets you own. You should also be prepared to ask yourself questions after your bankruptcy consultation to help you make an informed decision whether to file bankruptcy based on the information provided to you by the attorney during the free bankruptcy consultation.
5 Questions to Consider After Your Bankruptcy Consultation
1.) What effect will the Means Test have on my case?
The bankruptcy Means Test compares your income to the median income of a household of the same size in the same state as your residence. If your income is below the median income, you should be able to file a Chapter 7 case. A Chapter 7 will allow you to discharge most, if not all, of your unsecured debts in about four to six months. If your income is above the median income, you may still qualify for a Chapter 7 if you pass the second section of the Means Test by deducting allowable expenses from your gross income. If your income still does not qualify for a Chapter 7 case, you can still reorganize your debts and obtain debt relief through a Chapter 13 case. The attorney will discuss the pros and cons of each bankruptcy chapter during your bankruptcy consultation.
2.) Which Chapter Best Fits My Situation?
The second consideration is what chapter of bankruptcy best fits your financial situation. In some cases, a person may qualify for a Chapter 7 bankruptcy but due to other issues, that person may need to file a Chapter 13 case. Examples of why you may need to file a Chapter 13 case include:
- Protecting an asset
- Stopping a foreclosure or repossession
- Paying back a non-dischargeable tax debt, alimony, or child support
- Placing a non-dischargeable student loan in deferment until the debtor can recover financially
The attorney will discuss these issues during your bankruptcy consultation and explain why he feels you should file under a specific chapter of bankruptcy.
3.) Would Another Option Fit My Situation Other than Bankruptcy?
In a few cases, some people may benefit more from a consolidation plan or by settling debts with specific creditors. There could be several reasons why filing bankruptcy may not be your best option. However, in most cases, filing bankruptcy is often the most affordable way to resolve debt problems. Your bankruptcy consultation provides the opportunity to discuss filing bankruptcy as well as exploring other non-bankruptcy alternatives.
4.) Are any of my assets at risk if I file bankruptcy?
This is a common concern for most people considering filing a bankruptcy. Almost all debtors who file Chapter 7 retain all of their assts. If an asset is at risk, you can most likely protect the asset by filing a Chapter 13 case. Your attorney will analyze your assets during the bankruptcy consultation to determine if he believes an asset may be at risk before explaining your options to eliminate debt. For some people, it is worth losing an asset in order to get rid of thousands of dollars in debt.
5.) Do I Need to Take Extra Steps Beyond Bankruptcy to Ensure I Won't Fall Into Debt Again?
Yes, everyone should take steps to avoid falling into debt again in the future. Many people who file bankruptcy do so because of a financial crisis they could not control such as unemployment, divorce, loss of a spouse, failed business venture, or unexpected illness. However, creating a personal budget, living within a budget, establishing an emergency savings account, and contributing to a regular savings account can help you avoid falling into debt again when an unexpected financial crisis occurs. Debtors learn many of these skills as they complete the Debtor Education Course as part of their bankruptcy case.
For more information on if bankruptcy is right for you, spend some time reading our Debt Solutions 101 eBook. After determining a few options you believe could work for you, talk with an experienced bankruptcy attorney. They have many years of experience and can help you decide on the best solution for your situation.
