When things are going bad for a company, the owner is already stressed about paying employees and covering bills, so bankruptcy isn’t even on the radar. There’s a lot to think about before you file, and it’s worth talking to a business bankruptcy lawyer first to avoid costly mistakes and unnecessary headaches later. Laying out your options and how to get back on track early can really help you in the long run. The trouble is that many business owners who are considering filing for business bankruptcy don’t know what to expect, let alone which lawyer to choose to represent them. You need a lawyer. You don’t need just any lawyer. You need the right lawyer.
At Delancey Street, we are a business debt settlement company, not a law firm. We negotiate with funders and lenders on behalf of owners, and when bankruptcy is the better path, we say so and help them find a solid bankruptcy attorney. It’s important to ask questions at your first consultation, no matter how embarrassing they may seem or how simple the answers may be. Here are eight questions to ask a business bankruptcy lawyer in Brooklyn. This isn’t meant to be all the answers. It will only help you find out the right questions to ask before you walk into the room.
The first question is whether there is a viable alternative to filing for bankruptcy at all. The answer tells you whether this lawyer will actually weigh the best option for your situation. Or are you just going to be yet another client signing off on a default option? There might be no choice but to file. But if a lawyer tries other paths first, that shows they have your back. Asking about alternatives also pushes the lawyer to demonstrate their understanding of your business. They will have to look at the numbers. So, by asking the right question, you make the lawyer dig into the case first. Probing questions about the financials of your business tell you a lot about the quality of the lawyer you are interviewing.
Second, if the lawyer says you should file, ask why the alternatives won’t work. And in most cases, if you are already sitting down with a bankruptcy lawyer, odds are you will need to file. A lawyer who says yes to bankruptcy isn’t necessarily a bad lawyer. What counts is whether they can show you why the other options won’t work for you. A good lawyer should be able to answer that question honestly.
Third, ask what pros and cons you should prepare for. There’s almost never a perfect bankruptcy case with zero drawbacks. Maybe you have assets that need protection or you are worried about finding the money for a Chapter 13. Discuss these hurdles with your attorney early on so you’re not blindsided. Weigh the negatives against the positives before deciding to file bankruptcy.
Fourth, ask how they will handle the rough spots. A good lawyer will be upfront about the negatives, and it’s your opportunity to gauge their approach to the tougher side of your case. Are they dismissive, as if it’s no big deal? Or do they take it seriously, the way a doctor does a diagnosis? Will they make excuses? If they discuss in a realistic way what the likely problems are, the process you can expect to go through, and how they can help you overcome challenges, then that’s a good sign.
The Lawyer’s Track Record
Fifth, ask what portion of their practice is dedicated to bankruptcy. How many bankruptcy cases have they handled? What percentage of their practice is bankruptcy? This part of the meeting may be short, but you want to know about the lawyer’s track record of winning similar cases. Their practice should be largely, if not wholly, in bankruptcies. You want someone who really knows the process inside out.
Sixth, ask about litigation experience related to your type of case in particular. “Have you tried any cases like mine?” Do you want to risk someone never having tried a case like yours? Of course you don’t. Ask! It’s a conversation after all, it’s a two-way street. That said, this should be just one of many questions you are asking during your initial consultation.
Pick a Chapter
Seventh, ask which type of bankruptcy you should file. You have probably heard of Chapter 7 and Chapter 13 already, and a good lawyer will be able to explain what the difference is between the two bankruptcies and help you decide which is the best route for your filing. If you file, you have to pick a chapter. And that requires weighing options and making decisions on how your case will be handled. Basically, if you’re doing Chapter 7, you must pass the means test, which means your monthly income can’t be more than the state’s median. If you don’t pass, or you’d rather not liquidate, you should go for Chapter 13.
What Makes Them a Good Partner
Eighth, ask what separates them from every other business bankruptcy lawyer in Brooklyn. Put it plainly: “Please tell me what makes you a better choice than any of the other bankruptcy lawyers in Brooklyn.” Some lawyers may get offended, because in their eyes, they are the best choice for any client. Ask anyway. This is a partnership, and you want the best, so don’t be afraid to ask a lawyer to explain what makes them a good partner.
No, really, you need to ask questions, because all lawyers are different. And if you are still weighing whether to file or to try settling with your creditors, our first consultation at Delancey Street is free and confidential. If a cheaper option exists, or bankruptcy is the better path, we will tell you on the first call.
