Delancey Street is a business debt settlement company for business owners. We work for owners who take merchant cash advances or other business loans and are struggling to repay them. We’re not a law firm, but when a business owner needs to file for Chapter 11 bankruptcy protection, we refer them to a vetted independent attorney. If you’re in this situation, you’re probably under a lot of stress, and that makes big decisions harder. Picking a lawyer is a big deal, and it’s worth doing some prep before you hire one. Most of it comes down to the questions you ask. If you’ve never needed a lawyer before, you may not know what to ask, so whether you’re in Minneapolis or anywhere else, here are seven things to find out.
Prepare for the Meeting
The first is that the consultation is your interview. Bankruptcy lawyers often offer prospective clients a consultation so you can get to know each other, and it’s the right moment to interview them and decide whether you feel comfortable enough to hire them. Remember, the choice is yours. The consultation is an important moment: use it to get to know their background, experience, and fees, and to go over your options. Before the meeting, write out a list of questions to make sure you cover everything you want to talk about.
Second, ask about experience. It’s usually easiest to open with the person’s background: ask how long they’ve practiced bankruptcy law, how many clients they’ve helped file each year on average, and whether they practice other areas of law. If they’re a generalist who does a little bankruptcy work on the side, what share of their time and attention do they usually devote to bankruptcy law? Are they a member of any bar associations or other professional organizations?
Third, bring your paperwork. Prepare for the meeting by putting together as much information about your finances as you can. You’ll need
- a list of your current and past debts;
- a list of your property;
- a list of your financial accounts like checking, savings, mutual funds, IRAs, and brokerage accounts, and what the balances are in each one;
- a copy of the deed to your house if you own one;
- proof of income, like tax returns and pay stubs;
- and any recent letters or calls from collectors.
Ask the Attorney
Fourth, let the lawyer tell you what your options are. When you talk with the bankruptcy attorney, show them any relevant documents you have and get their take on your options. Don’t try to play lawyer – that’s why you’re hiring one. Ask them if you have any options other than filing for bankruptcy at all, and when they talk about the different types of bankruptcy, pay attention to Chapter 7, Chapter 13 and Chapter 11. What are the differences between them? Which of your debts will get wiped out in each case, and which will you still owe? Which of your assets can you keep? Ask if you need to do anything before you file, and exactly when you should file. Finally, ask how long the process takes.
Fifth, find out who will actually handle your case. You need to understand how your case will be handled, or there will be misunderstandings, which you can’t afford. Is the lawyer available to personally represent you? Find out whether the lawyer you’re interviewing is the one who will actually be doing the work. If not, who will? Who do you contact if you have questions? How do you contact them – phone, email, carrier pigeon? How quickly do they respond to your questions? Do they go to the bankruptcy court with you, and represent you at meetings with the creditors and trustee? Will you get regular progress reports, and if so, from whom, what’s in them, and how often?
Sixth, get the fees straight. Bankruptcy lawyers typically bill either on an hourly basis or a flat-fee basis. These are very different systems, and it’s important that you understand what they include. Ask which method you’ll be billed under. If it’s hourly, ask the rate. If you’re going to be billed on a flat-fee basis, ask what the fee is, what it includes, and what you’ll be charged for if you need more help. Is the fee refundable if you change your mind or if you decide to switch lawyers? Does the lawyer offer a payment plan? How do retainers work? Ask the attorney to break down any fees, and find out whether there will be other legal expenses or costs, and ask for an estimate. Some firms generate receipts with legal billing software, which can help you spot hidden charges and unexpected fees. Also ask about the tools and services they use.
It’s Time to Decide
Seventh, know how you’ll make the call. After you’ve interviewed every lawyer on your list, it’s time to decide. This is easy if one of them meets all your qualifications and rises to the top of your list or is otherwise clearly the best option. Other times, after those interviews, you may be left with just a nameless feeling of “they all seem great” or “I just can’t decide.” To settle on the best choice, ask yourself: Which candidate had the legal background, experience and specific skills I need? Whose advice and judgment seemed best? Which of them earned my complete confidence? Whose fees were fair and reasonable? With which did I feel most comfortable? The answers to those questions should point to the best choice.
Bankruptcy is not the only road forward. One question to ask any attorney you’re considering is whether you have options outside the traditional bankruptcy process. At Delancey Street, our first consultation is always free and confidential, and if a cheaper option exists – or Chapter 11 Sub V is a better path – we’ll tell you so on the first call and point you toward bankruptcy counsel. Whatever your path, hire the lawyer you trust.
