In a perfect world no one would ever have to file bankruptcy.  In a somewhat less than perfect world the decision to file bankruptcy would be the result of cool contemplation, a weighing of one's options and consultation with a bankruptcy attorney.

But we don't live in a perfect or even close to perfect world.  The decision to file bankruptcy is often made in haste and a sense of desperation.  A potential client might ask around of friends and family to recommend a good attorney, but often the debtor is ashamed to be filing bankruptcy.  So it's to the internet, print phone directories or the back page ads of Westword.  Google "bankruptcy attorney Denver."  On the first page are advertisements for $500, $599 and $1000 bankruptcies  The seeker is already strapped for cash.  Why not pay $500 for a bankruptcy instead of the $1500--$2500 typically quoted by most attorneys?

REASON # 1.  You might end up paying full price any way.  Lawyers who charge $1500--$2500 are giving you a flat fee for complete service in filing and finishing your bankruptcy.  We know what we need to charge to net a reasonable fee after expenses and overhead.  The $599 bankruptcy cannot possibly do a complete job.  Heck, the filing fee is $299!  You have lots of creditors--that's extra.  You forgot a creditor--that's extra.  You may get charged for every phone call, letter, or copy.  You want a lawyer to go to the Meeting of Creditors--that's extra.  You have a pay day loan and they just don't get the concept of automatic stay.  A nasty letter from your attorney--that's extra.  Bankruptcy is so much more than filling out some forms and cashing the check.  Each case potentially has its own unique issues.

REASON # 2.  Most of your case will be handled by a non-attorney.  The only way a $599 bankruptcy attorney can make a living is volume.  That means the attorney may see the filing once, on the day it is filed.  I have known many fine paralegals.  They are competent within the limits of their expertise.  But the best paralegal in the city has not gone to law school.  She does not know how to read statutes and case law.  She is not trained to analyze facts in relation to the law.  She is not familiar with local judges and trustees.  She does not know the rules that are not written down anywhere.  Most of all, she does not have a professional license that is at risk if she makes a mistake.  I do.  Sometimes it keeps me awake at night.

REASON # 3.  Bankruptcy is extremely stressful for the client.  First, the client feels guilty about not paying his debts.  He feels like a failure.  He is worried that he will never be able to buy a house, rent an apartment, get a student loan.  A big part of my job is reassuring, from a position of competence, that everything is going to be all right.  Second, bankruptcy, even a so-called easy Chapter 7, is incredibly complicated.  There is a lot of technical terminology, incomprehensible notices that go to the debtor, the only sentence of which the client sees is "Your case may be dismissed without further notice."  My clients can call me and I will explain what is happening.  The client of the $599 lawyer will be talking to the paralegal.  Or voicemail.

REASON # 4.  Finally, your assets may not be protected.  An important part of what a bankruptcy attorney does is to plan strategically to protect client assets to the maximum.  A less skillful or careful attorney puts client assets at risk.  It is not uncommon to prepare for months before filing.  I can do that because I am compensated fairly. A $599 lawyer cannot do that.  The only way he can keep the doors open is volume and fast turnover.  He can't care.  He does not have time.  He cannot afford to care.

Example: I am writing this in early December.  In the past week I had two potential clients see me who had significant refunds from their tax return.  Most of your refund is non-exempt--that is, the trustee can force you to turn over the refund.  If I was a $599 BK attorney I would be tempted to take the fee and file.  The client loses his tax refund.  Instead, I explained why it was a good idea to wait until the return is filed, the refund received, and spent on exempt assets.

RECO0MMENDATION:  At your first meeting with a lawyer, ask the following questions:

•Do you personally supervise my case?

•Will I be able to get in touch with you if I have questions?

•What if I discover a creditor after we file?

•What if a creditor objects to discharge of a debt?

•What will you do if a creditor ignores the automatic stay?

•What will you do if the Trustee demands turnover of an asset that I think is exempt?