Q: I have a lot of debt and it’s getting hard to handle. Everyone says I should call a bankruptcy lawyer. Is that a good idea?
You should talk to a lawyer, but not a lawyer who only practices bankruptcy.
For debtors, bankruptcy is an option, but not the only option. Whether it is the best option depends on your goals and your individual situation.
On the other hand, debtors have many other options for dealing with debt. Debtors may be uncollectible – meaning that even if a creditor were to sue them, they could not get any money. People who are uncollectible include those whose earnings are at or near the poverty level, or people whose income is primarily or exclusively from retirement-based sources.
Debtors may also use legal means to protect assets prior to a lawsuit, making it harder for creditors to collect. There are, too, state-court proceedings that are less complicated than a bankruptcy, more affordable than one, and have less of a credit impact.
Most importantly, debtors may have claims to make against the creditor or debt collector if laws were not followed in the establishment of, maintenance of, or collection of the debt. In a great many cases, these laws have not been followed, and debtors might be able to use those violations to avoid payment of the debt, or even recover money for themselves.
If you are dealing with financial problems, you should make sure you speak to professionals who are familiar with all areas of law involving debt. A lawyer handling your debt issues should have a working understanding of bankruptcy, state court insolvency proceedings, debt collection litigation, consumer protection statutes, and real estate and/or foreclosure law. If a lawyer only knows bankruptcy, and rarely handles other types of cases, he or she is unlikely to be able to give you good advice about the best way to handle your case.
One way to make sure your lawyer knows all those things is to ask what percentage of their cases involve clients filing a bankruptcy, and what percentage involve clients who are not in bankruptcy.
Our lawyers at Lawton & Cates include Attorney Briane Pagel, who has handled numerous cases in bankruptcy court, but has also litigated cases for debtors in state and federal courts, worked with creditors on informal reorganizations, filed petitions for debtors in state court cases to stop collection efforts and force creditors to accept terms of repayment, and who has been asked by the State Bar to educate lawyers and judges on the best ways to help debtors get back on their feet. When you talk to Attorney Pagel and his colleagues, you can be sure that he will help you determine the best way to handle your situation, rather than simply forcing you to pick one option.