A Complete Guide to Bankruptcy Lawyers

Introduction

Bankruptcy Lawyers are the attorneys who assist and deal with cases related to bankruptcy on the behalf of their clients. To understand bankruptcy lawyers, it is necessary to first understand what bankruptcy is.

Bankruptcy is a legal process through which a person, a group, an organization, or other entities who are unable to repay debts to the lender, seek relief from some or all the debt. The process of bankruptcy is usually initiated by the debtors however, that is not the case all the time.

When a person or any other entity declares bankruptcy, it indicates that the person or the entity is no longer able to repay the debt as per the original agreement. Once you declare bankruptcy, it grants you an automatic stay which will restrain your creditor to collect the debt from you.

When you declare bankruptcy in front of the relevant court, the court will try to compensate the creditor by deducting money from your bank account, garnish your wages, or will go after your financial assets which also include your properties.

Bankruptcy in the USA

Just like any other country, bankruptcy laws are explicitly added to the legal system of the US and there are many bankruptcy lawyers available to represent their clients in the courts. Under Article 1 Section 8 Clause 4 authorizes the Congress of the US to enact uniform laws related to the subject of bankruptcy throughout the US. Congress has exercised this authority first time in 1801 and since then they enacted many bankruptcy laws including the famous Bankruptcy Reform Act of 1978.

In the US, bankruptcy is subject related to federal law commonly referred to as the Bankruptcy Code. Bankruptcy lawyers file the cases in district courts of the US and the federal laws govern these cases. However, the state laws may govern the ways and determine how the bankruptcy will affect the property rights of the debtors.

Major Bankruptcy Laws in the US

The Congress of the US has incorporated many bankruptcy laws since the independence of the country. As mentioned earlier, the first major law related to bankruptcy was enacted in 1800 and since then many bankruptcy laws have been incorporated into the laws of the US. Here we are going to discuss major bankruptcy laws that are present in the US.

Chapter 7: Liquidation

Liquidation under Chapter 7 of the US code is the most common type of bankruptcy. Under liquidation, a trustee is appointed by the federal courts of the US who collects the relevant non-exempt property of the debtor and sells it. After selling the property, the trustee then repays the debt of the creditor.

Chapter 11, 12, 13: Reorganization

Bankruptcy under these chapters is a little bit complex. This reorganization allows the debtor to keep some or all of these properties and use the earnings from them to repay the debt.

Who are Bankruptcy Lawyers?

Bankruptcy Lawyers are attorneys who are specialized in dealing with cases related to bankruptcy both outside and inside the courts. Outside the courts of the US, bankruptcy lawyers advise their clients that how can they reduce or completely pay off their debt to the creditor. The pieces of advice can range from liquidating their assets or buying time in one way or the other.

On the other hand, in the courtrooms, the bankruptcy lawyers present a legal plan for the reorganization of debt to get it approved. Although, the chief aim of bankruptcy lawyers is to save their clients from full bankruptcy, however, in critical situations they also file bankruptcy documents.

Upon declaring bankruptcy, they ask the courts to get their client free from the debt plan by any means or condition. Nevertheless, bankruptcy lawyers also appear in the courts to represent the creditors. While representing the creditors their main aim is to extract as much money as they can from the debtor in form of cash or property. So in all the cases in the US related to bankruptcy, the attorneys on both sides are bankruptcy lawyers.

Qualities to Look for in Bankruptcy Lawyers

Looking for a competent lawyer is a difficult task to perform especially today when there is a whole bunch of lawyers available out there. If you have an invention for which you wish to obtain a patent and wants to hire an attorney to do so, these are the following qualities and skills you must look for in them

Availability

You must look for bankruptcy lawyers who can spare enough time with you to understand your case. The availably is a big issue people face while dealing with their attorneys because a single attorney may be dealing with dozens of cases at the same time. As we know the bankruptcy law is a comparatively technical one so it requires a deep study of the case.

Experience

Before hiring bankruptcy lawyers you must first look at their profiles. If the profile shows that these bankruptcy lawyers have dealt with cases related to bankruptcy, tax, finance, or other money-related cases then you can rely on them. Also, they must have won such cases because dealing with bankruptcy cases is one thing and being successful in it is another.

Ratings

Before hiring bankruptcy lawyers you must first look at their ratings. For that, you can go and see their profile on LinkedIn and other social media platforms such as Google and Facebook. In other words, you need to evaluate the reputation of bankruptcy lawyers before hiring them. You can also consult your friends and family for this purpose.

Expertise/Specialization

Last but not the least; you must have a look at the expertise of bankruptcy lawyers before hiring them. If a lawyer has specialization in the fields of bankruptcy or finance tax you must prefer him/her over someone who does not hold such specialization.

Some bankruptcy lawyers earn expertise in a specific field by practicing it over some time. The bankruptcy lawyers with such experience and expertise must be preferred by you over the others.

Professionalism

Many people forget but professionalism is one of the most important qualities a bankruptcy lawyer should have. A professional lawyer will provide you with the highest quality service, keep you updated on the case and professionally approach your concerns ensuring comfort at all times. This is the perfect trait for creating the best attorney-client relationship.

A professional lawyer will offer you a free consultation which is a great sign that the lawyer is willing to give you his or her valuable time to listen to your case. Professionalism also refers to consistent communication which is required when you hire a lawyer. Having consistent communication will always keep you on top of the case and help you in making the right decisions whenever required. A professional lawyer will always keep you stress-free and deal with the relevant parties without you getting your hands dirty. This is the kind of service business owners should expect when dealing with bankruptcies.

How to Become a Bankruptcy Lawyer in the US

Just like any other profession, bankruptcy lawyers need to struggle hard to achieve their aim. Here we are going to discuss the steps that are necessary to become a bankruptcy lawyer in the US.

College Graduation

In the US, to attend law school, you need to have a four-year degree of undergraduate. And in your undergraduate program, you don’t need to necessarily pick a law major instead you can pick any courses you want.

However, if you have decided that you want to become a bankruptcy attorney then it is better to pick courses related to finance, business and accounting. But it’s alright if you go for subjects of natural science such as physics or math. Many colleges in the US and elsewhere are offering a pre-law degree in their undergraduate programs.

Search for Law Schools

Once you completed your undergraduate degree and decided to attend a law school you must first search for them. While searching for law schools in the US it is better to look for law colleges that are accredited by the American Bar Association (ABA).

By attending a law college accredited by American Bar Association, you will be able to appear in the bar examination of any state. You should look for the following constraints while comparing different law colleges

• Cost/Fee: In general, law schools are quite expensive as historically it is considered as a profession of Lords in the UK. Many law colleges in the US cost more than 50000 USD a year just for tuition fees. Apart from the college fee, you will also have to cover other living expenses. For example, if you have to move to another state or even to a city other than yours you will have to bear the expense of a hostel or some other residence. Although many law colleges in the US are offering part-time programs, it has two problems. First, it will be difficult for you to work and attend a law college at the same time because a law degree is comparatively difficult. Secondly, enrolling in a part-time program can prolong your degree up to 5 or 6 years. So while selecting a law college in the US you must consider all the financial constraints.
• Admission Standards: It is another important constraint you must consider before selecting a law school in the US. Law schools will tell you about the number of applicants admitted as well as their GPA and score in LSAT exams. You must select a law college that is competitive so that you can quality education as well as a competitive environment.
• Job Placements: When you attend any college your primary motive is to get a better job, so is the case with law colleges. Almost all the law colleges in the US show detailed information about the job their alumni have got after attending their college. This information will be available on the websites of respective colleges.

Get a Recommendation Letter from the Professors or Other Professionals

Many law colleges in the US ask for two or three recommendation letters for admission. You can get these recommendation letters from the professors from your undergraduate college. However, you should ask for recommendation letters from those professors who know you well and you have performed well in their classes.

If it has been quite a while you have attended your undergraduate college and you are unable to get a recommendation letter from your professors, then you can get the help of your employers. The employer should highlight your work ethics and interpersonal skills. Nevertheless, you can also get a recommendation from other social leaders such as any religious leader.

Appear in LSAT Exams

Before admitting to a law college in the US, it is mandatory to take the LSAT test. The major portion of the LSAT is based on multiple-choice questions (MCQs) in which questions will be related to reading comprehensions, analytical reasoning, logical reasoning, and general knowledge. There will also be a subjective part in which you will have to write an essay on the given topic. In the US the LSAT test is offered 4 times a year.

Normally, these tests are taken in September, December, February, and June but in extraordinary conditions such as the emergence of Covid-19, they can be taken on alternative months. These tests are taken on either the day of Saturday or Monday. If you are not satisfied with your LSAT score, you can reappear in the test to improve your score.

Apply for Law Schools

After clearing the LSAT test and getting your certificate the next step is to apply for the law colleges. Most of the law colleges in the US consider two factors while enrolling the students in their law degree. The first one is the score you have obtained in your LSAT test and the second one is the GPA you have obtained in your undergraduate program.

The weightage of the score of these two tests varies from college to college but normally both carry 50 percent marks each. However, some law colleges in the US also consider other factors while admitting the students such as your work experience or recommendation but even in that colleges these factors are only considered at the margins.

Attend a Law College

Once you got admitted to a law college in the US, you only need to complete your law degree. However, just like in any other program or degree it is very important to perform well in the law degree. Because the grades really matter in the professional career especially in the initial years.

If you want to join a law firm after completing your law program from college, it is important to have good grades. Although, the grades will not matter after having some experience the good grades can ensure a head start for your professional career.

Chose the right electives

As you, in the professional degrees, many electives courses are offered and you can choose from them according to your interest. Now, this is very important to select the relevant electives if you want to become a bankruptcy lawyer. You should select the subjects relevant to bankruptcy such as financial law and accounting. Studying tax laws is very important for bankruptcy lawyers.

Work for Bankruptcy Attorneys in the Summer Breaks

During your law program at the law college of the US, you will normally get 2 summer breaks. In these summer breaks instead of wasting time, it is better to work for some bankruptcy lawyers so that you can gain some experience that will be helpful for your professional career.

You should look for experienced and professionals near you and search for a relevant job online. You can send your CV to a professional bankruptcy lawyer and request them to let you do an internship with them even if it is unpaid.

Appear in MPRE and Pass it

MPRE stands for Multistate Professional Responsibility Examination. It is a test that is mandatory in many parts of the US for entering into a professional career. Normally this test is taken in the third year of your law college. In this test they will test your ethical and legal skills and this test will be composed of objective type in which there will be almost 60 multiple-choice questions.

Pass the Bar Exams of the State

Once you complete your degree in law from a law college you will have to pass the bar exams of the relevant state to obtain the license of a lawyer. The bar exams vary from state to state. In some states, you will have to appear in one exam only while in others you have to pass multiple exams.

Though the National Conference of Bar Exams (NCBE) has provided some components which all states must comply with, the exams vary a lot from state to state. In these exams, you will have to solve multiple-choice questions (MCQs) on different areas of law and the conduct of lawyers. Also, just like Lawsuit Admission Test (LSAT), you will have a subjective portion of the exams in which you will have to write essays and situation-based questions.

Do Specialization

Though you are qualified enough to practice bankruptcy law after completing the previous step, you can also do specialization in it. Some bankruptcy attorneys who want to expand their expertise in the field of bankruptcy, finance, and tax law do LLM in the respective field. This not only gives them more knowledge but also helps them to increase their client base both quantitatively and qualitatively.

All About Bankruptcy Attorneys: Qualifications and Skills

To flourish in the professional only obtaining a degree from a well-known college is not enough and the same is the case with bankruptcy lawyers. To be successful, you have to obtain certain skills and capabilities which we are going to discuss here.

Qualifications

We have already discussed the qualifications required by bankruptcy attorneys. After doing a degree in science or a relevant field you have to pass the Lawsuit Admission Test to qualify yourself for a law college. In the Law College, you will earn a law degree and then pass the Multistate Professional Responsibility Examination (MPRE). Then you have to pass the bar exams to get a license of law practicing. After that, if you wish to do specialization you get yourself admitted to LLM in a law college.

Skills Acquired by Successful Bankruptcy Attorneys

• Honesty: Honesty is a fundamental quality that is required in any field and bankruptcy is no exception. However, in this particular field, this quality holds even more importance. Most of the clients that come to bankruptcy lawyers already struggle with the debts they can’t pay. And if bankruptcy lawyers do some sort of fraud with them it will not only harm the clients but also cost the reputation of bankruptcy lawyers.
• Clarity: To become a successful bankruptcy lawyer it is very important to have clarity in conversation. Because any miscomputation with colleagues or the clients can misrepresent the actual situation and cost hugely to both the clients and bankruptcy attorneys. While studying the case of your client it is important to ask cross-questions to have a clear-cut picture of the situation.
• The capability of adaptability: With time, the scope of bankruptcy is radically increasing and for successful bankruptcy attorneys it is imperative to have the skills of adaptability. With the revolution of information technology, the demand for bankruptcy attorneys is drastically increasing and so does the expectations from them. So to meet those expectations, they need to incorporate new skills and knowledge.  
• Teamwork: As we have mentioned earlier that the scope of bankruptcy law is increasing rapidly so to compete with the pace of it is important to have strong teamwork skills. It is because no single bankruptcy lawyer can have all the expertise related to bankruptcy. So with strong skills of teamwork and leadership bankruptcy attorneys can ensure success for their clients. Every case requires a team of 2 to 3 attorneys and if the chemistry is missing between the team members it may not work.
• Be diplomatic with multiple clients: Bankruptcy attorneys will often face a situation where they will have to deal with multiple clients. If they will prefer one client over the other it will make a very negative impact on the clients. And it is clear that the clients will try to pursue their case and will expect the bankruptcy lawyer to prefer them over the others. So having strong skills in diplomacy is very important to keep all the clients satisfied.

Salary and Costs

Just like any other field of law, the salary of bankruptcy attorneys varies from lawyer to lawyer. A bankruptcy lawyer who has experience of 15 years or more will charge more than a bankruptcy lawyer who has experience of 2 or 3 years. Apart from experience, the success rate of bankruptcy attorneys is also a major determinant of the cost of bankruptcy attorneys.

A bankruptcy lawyer with a success rate of 100 or even 90 percent will charge more than a bankruptcy lawyer with a success rate of less than 50 percent. Similarly, the cost and salaries of bankruptcy attorneys vary from state to state. A lawyer who is practicing in big states such as California or New York will charge higher than a lawyer who appears in courts of the small midwestern state. However, if we talk about the average salary of bankruptcy attorneys in the US, the base salary ranges from 49,650 USD to 91,508 USD.

Advantages of Hiring Bankruptcy Lawyers

If you are unable to pay your debt to the creditor, the only legal way to get rid is filing bankruptcy and for that, we will need the assistance of bankruptcy attorneys. Following are the advantages of hiring bankruptcy attorneys:

Bankruptcy Attorneys Help You in Planning Bankruptcy

Even if you are unable to pay the debt to the creditor you should not jump into a bankruptcy case without a complete plan and knowing all of its consequences. You should first consult bankruptcy attorneys. They will help to determine whether there is any other option available for you or not. It is very important to first look at all the alternatives before filing for bankruptcy because of the implications attached to it.

Experienced bankruptcy attorneys will examine your case and will give you a piece of advice that whether reaching a negotiating settlement can resolve your issue or you will have to go for a full bankruptcy case. And if it is decided that filing for bankruptcy is the only option available for you then which type of bankruptcy is appropriate for your case. There are two main types of bankruptcy which we will discuss later.

Bankruptcy Attorneys Help You with Bankruptcy Preparation

Once you have decided to file for bankruptcy, there will be needed a lot of preparation for which you will require a professional. First of all, filing for bankruptcy will require complete documented information about your income, debts, savings, income, and properties. It is important to note that committing a little mistake in this process can cost you hugely. It can lead to very long delays and can even result in the dismissal of your case by the courts.

Also, if you don’t provide full information about your assets and debts or provide the court with false information, you can face serious allegations of bankruptcy fraud. However, professional bankruptcy attorneys will know how to complete and compile the documentation. They will know how to prepare your case and how to present the information to the courts to benefit you.

Bankruptcy Lawyers Present the Case on your Behalf

As we have mentioned earlier that the legal process of bankruptcy is governed by federal laws and is contested in federal courts. So for this reason, it is very important to know all the relevant provisions of law and the procedures of the courts. This can only be ensured by hiring well-known and experienced bankruptcy attorneys.

During the proceedings of your case, you will get engaged with the judge and the prosecutor quite a few times. The communication with the judge and the prosecutor should be carefully handled because the information you will provide during the communication can have a serious impact on your case. Bankruptcy attorneys hired by you will help you in this matter. They will let you know what information you should provide on the specific questions.

Cases in the courts are presented by the lawyers and the professional bankruptcy attorneys will be equipped with the knowledge of case proceedings especially when it comes to bankruptcy cases.

Bankruptcy Lawyers Guide you in Post-Bankruptcy

Filing for bankruptcy does not mean that you will no longer be bound to repay your debt to the creditor. Though it provides you with some relief that doesn’t mean it will be free of cost. It will have some cost and bankruptcy attorneys will guide you on how to pay the cost.

They also provide you with suggestions for rebuilding credit in a smooth, responsible, and successful way. Bankruptcy attorneys hired by you, aim to get to the best deal in the given circumstances. They will also guide you in liquidating your properties to repay the debt.

Bankruptcy Lawyers Help you Obtain an Automatic Stay

If you cannot pay the debt to the creditor as per the agreement you don’t have to worry much about it. Just hire bankruptcy attorneys and they will help you sort it out. When you declare bankruptcy through your bankruptcy attorneys, it will trigger an automatic stay that will restrain the creditors from taking action to collect the debts from you. This automatic stay will also restrain the creditors from calling you, messaging you, or suing you in the courts.