This is one of the most common questions I receive during the free consultations provided by our firm. It seems like a fair question at the outset, but the reality is, filing for bankruptcy is more complicated than most people realize. There is a lot of document gathering that needs to be done by the client that cannot be done by the attorney. This gives the impression that the client is doing all the work. However, there are a lot of nuances to the bankruptcy code that can have devastating affects if not addressed properly. That is the reason that it is wise to pay an attorney to help file your bankruptcy.
One of the biggest nuances is protecting the equity in your home. There are limits on how much equity an individual can protect before they may have to turn over other assets. The attorney must help the client understand what assets, if any, may be at risk. A plan must then be formulated on how to handle those assets; whether it is to sell before filing or pay the bankruptcy estate to keep the asset. If you don’t own a home, there are still plenty of other reasons to hire an attorney.
Another potential asset at risk in a bankruptcy is a tax refund. Depending on how large your tax refund is going to be and how many other assets you have, it may be that you need to wait to file your bankruptcy so you don’t have to turn over a portion or all of you tax refund over to your bankruptcy estate. Careful planning by an attorney could save you more money than you pay in attorney fees.
So while your attorney may ask you to gather a lot of documentation to file your case, you could be out more money than if you had hired them.