Sometimes you can find it.
Most of the time however, like what I’ve encountered here in Southern Riverside area of California, usually, it’s a bait and switch. They claim that you’ll get a cheap bankruptcy and when you get there, or when you call, it turns out that it gets you the most minimal bankruptcy ever, and probably you won’t even meet an attorney. When I occasionally charge only $700 plus the filing fee, it’s because the client is a widow or a cancer patient and when I do charge so little, guess what? You won’t meet a paralegal, I still go to the hearing with you, and unless I’m sick or on vacation, I’ll be the attorney at your hearing, and you’ll meet me when you get to the office, and I will be the one who types your bankruptcy.
Before we get started, Disclaimer: Nothing in this article may be mistaken as legal advice. Attorney David Nelson, is licensed only in California, and this article is intended only for readers in California. This article is for entertainment, educational, extra-curricular, and medical purposes only. If you decide to rely on this, heaven help you.
I’ve called similar cheap ads before, and other bankruptcy attorneys I know have called similar ads. Here’s what we’ve found:
Most of the cheap bankruptcy guys don’t go to the hearing with you unless you pay them more. Even then they probably don’t go themselves but hire a pinch hitter attorney to go for them and that guy won’t have read your file, and doesn’t know you or your case. At least in Riverside the pinch hitters are good attorneys who take good notes, but they can’t fight for you on the spot because they have so little knowledge of the case, the file or you. In fact, often you’ll find that the first phone call you’ve made was to a paralegal and he has an attorney who “supervises” him. If that’s the case, run the other direction. In that situation, if you want to meet with an attorney, you can, but only if you pay them more. If your income approaches the median income for your jurisdiction, it will cost you more. If they have to do the whole means test calculation for you at the consultation, it will cost you a lot more. If you have a house, it will cost you more. If you owe any taxes even property taxes, it will cost you more. If you have more than 10 or 15 creditors/accounts/collection agents/attorneys who must be listed in your bankruptcy petition, it will cost you more. If there is a judgment against you, and your bank accounts have been levied, it will cost you more. If your wages are about to be garnished or are being garnished, it will cost you more. If you have a car or a refrigerator that must or might need to be reaffirmed, it will cost you more. If the attorney or his paralegal fart while you’re in the office, that’s a value added perk and it will cost you more.
Most of us who have called this or similar ads have found that by the time the average bankruptcy client’s consultation is over, it will cost the retail price of $2000 or more to go bankrupt, plus the filing fee. Incidentally, the filing fee currently for a chapter 7 bankruptcy is $306 at this writing.
Even worse, many unscrupulous or lazy attorneys (and I haven’t heard or seen that the $799.com guys do this) will try to
upsell a chapter 13 bankruptcy
to you with a payment plan where the attorney makes at least $3500 to $4500 per case. Lovely isn’t it?
Bankruptcy attorneys who don’t do the careful analysis will advise a chapter 13 because your income is “too high.”
You require a careful analysis of your income and expenses in order to know if you really qualify for a chapter 7 or not. There are a lot of frequently overlooked factors or factors that require a lot of documentation. Some attorneys just don’t know what they are, especially if they were doing divorces a year ago and decided to get into the bankruptcy boom. I’ve been doing bankruptcy since 1994. Some attorneys are just too lazy to amass the required documentation in order to prove your case for you. Of course, some just want more money per case.
Will everyone do this? Of course not, will the cheap bankruptcy guys do this to you? I haven’t head that they do and I believe that most won’t based on what I’ve heard and the calls I’ve made, just that by the time you get done, they’re charging you retail for your discounted bankruptcy. Possibly some of them have changed their ways since I and my colleagues telephoned to ask about prices, I don’t know. In fact, I’m writing in the hope that it will spawn a reformation in the practice of the bait and switch statewide.
The firms that will more likely try to get you into a chapter 13 are the big ones. Several names on the door that sort of thing. Trust me, if you go in for a bankruptcy consultation to a Victorian building on the outside of downtown and the lawyer(s) have several support staff and a few new Mercedes in the lot, guess who’s paying for all that? Are they better at bankruptcy than me? Nope. Better looking, yes, and they’ll charge you more for that too. They are better at marketing, their websites cost them mega-bucks per year in upkeep and they pay huge rents and payrolls and their personal expenses are more than many of you make in a month or a quarter.
Don’t get me wrong, if you make a good bit more money than the average bear, then you have a higher than average probability of having to do a chapter 13. That’s what it’s for, if your income is significantly above the median, you might not be able to avoid a 13, but I’ve also seen cases where the income was a good bit over the median which qualified for a chapter 7. Did they qualify because I’m some bankruptcy wizard or a debt vampire who suck the vacuum of your finances away? No. Those clients qualified because once the analysis was done and the documentation gathered to prove the analysis, they did in fact qualify for a chapter 7.
Congress hasn’t left any wiggle room in the Means Test.
Either you have passed your means test and you qualify for a chapter 7 or you didn’t. What the right attorney brings to the table is the analysis, not a way to fudge the numbers and make you qualify but the proper analysis based on the right reasons that show that you do qualify when you in fact already do.
Because every case is different, you must get the right consultation. Yes, even at chez moi it will cost you more than the average 7 but it will still be less than a firm with several names on the door. Possibly less than the guys with the cheap bankruptcy advertising.
When discharging taxes, the right attorney can make all the difference. Especially if you call early. See this article. If you owe a lot of taxes, and I’m not talking about property taxes, but the board of equalization taxes, federal income taxes, self employment taxes and the like. And if you do, expect to pay more if you want your attorney to tell you that you have a high probability of discharging them in a bankruptcy.