What role does an attorney play in a Chapter 13 bankruptcy case?
June 29, 2022
By Diane Drain Attorney & Retired Law Professor
According to statistics from the Bankruptcy Court, only around 2% of people who file without a counsel ever succeed in a chapter 13.
This figure predates the 2005 Reform Act, which significantly increased the complexity of bankruptcy filings. Many people ask me if they “can file for bankruptcy on their own.” “Yes, anyone has the legal right to perform their own open heart surgery, so why not their own bankruptcy?” I always respond. (I’d like to thank Judge Baum for the quote.) Bankruptcy laws and rules have always been a source of stress. After the 2005 amendments, I feel that only a fool would file for bankruptcy on their own, no matter how “easy” it may appear. In reality, many lawyers stopped practicing bankruptcy law when the law changed because it had become so complicated; even fewer will assist with chapter 13.
Never take advice from someone who has already declared bankruptcy. They had a “fool for a client” and almost certainly committed at least one federal felony, yet they escaped detection. I say this not because I want everyone to hire me, but because of the daily horror stories I hear about people losing their tax refunds or their families being sued because a debtor repaid a debt or transferred an asset. Normally, all of this would be done without malice, but bankruptcy considers those actions to be fraudulent. The Attorney General’s Office is proactively enforcing the new laws, and it is actively pursuing bankruptcy fraud.
You will wind up paying their advertising expenditures if you use those who advertise on TV.
Also, “legal document preparers” should be avoided. These are people who desire to be lawyers but have chosen not to attend law school. Instead, they act as though they know the law, or worse, they are disbarred attorneys or other criminals who prey on the vulnerable. Always double-check your lawyer’s credentials with their state bar. Inquire about the lawyer’s recommendations. The majority of people get decent lawyers by asking their friends or relatives for recommendations.
In a chapter 13 consumer case, the debtor’s attorney will do the following:
Determine whether bankruptcy is the best solution for the debtor’s financial troubles by examining the amount and kind of the debts owing by the debtor.
Before filing the bankruptcy, Assist the debtor in arranging his estate for bankruptcy so that just a small portion of his assets must be turned over to the Trustee later.
Examine the Debtor’s payment and transfer history to identify potential exposure to the Debtor and others.
Collect the data and information needed to construct the bankruptcy schedules and statements for filing.
In a chapter 13, assist the client in understanding their responsibilities.
Prepare a reorganization plan based on the debtor’s circumstances, the law, and the realistic options available.
Prepare the necessary petitions, schedules, and statements for bankruptcy court filing.
Check to see if the education classes are required. If this is the case, submit the relevant certificates to the court.
File bankruptcy petitions, schedules, and declarations with the court.
Solve any redemption, surrender, or reaffirmation issues.
The Plan of Reorganization should be filed and noticed.
Attend the Debtor’s Meeting of Creditors.
Respond to the Bankruptcy Trustee’s and creditors’ concerns about the Plan and other documents filed with the Court.
Attend hearings for Plan Confirmation.
Modifications to the Plan should be addressed when circumstances change during the Plan’s term.
Prepare and file revised schedules as the Debtor’s circumstances change and/or the court orders.
By Diane Drain|Published On: June 29th, 2022|Last Updated: July 28th, 2022|
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
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