Paralegal Power Blog

A Blog for the Legal Professional

Bankruptcy Consultations:
If I Ruled the World

I love my attorneys very much, no doubt. However, it takes about two years of practicing an area of law for them to remember to cover all these basics, so I created this blog as a checklist of sorts to help the average attorney make sure the typical prospective bankruptcy client doesn’t walk out of the consult without knowing all of these things.

If I ruled the world no attorney would forget to do the following in their bankruptcy consultations.

Be Sympathetic
Smile
Make sure the client falls below the median income first.
Click here for a link to every state’s current median income.
1. If the client is slightly above the median income, please be clear with them that :
  1. it will require more work to prove that they qualify for a Chapter 7 filing.
  2. That we are paid for our time, so more work means more attorney fees.
  3. That they should expect the paralegal on the case to ask a million and two questions about their financial situation and it is in their best interest to be as cooperative as possible. Every penny adds up, every qualified deduction matters and as a team, we will do everything we can to make sure our clients get the justice they deserve.

FREE FOREVER | NO CREDIT CARD NEEDED

Bankruptcy Fees – Every Single One of Them

4. Then make sure the client knows how much the fees are and please make sure you make it clear as to whether any of these fees are included in their attorney fees:

1. Attorney Fees
2. Cost of Credit Report
3. Fees for Credit Counseling Course
4. Fees for Debtor Financial Management
5. Filing Fees

Now is a great time to give them the Notice to Consumer Debtors Under 342(b) of the bankruptcy code. Here’s a link to it, but if you forget, don’t worry – you know your bankruptcy paralegal will send it to them with the first draft and have them sign it at the signing meeting.

Asset Check

Make sure the client is not over asset. Instead of asking the client to detail their assets, since that’s what the paralegal will do in detail later, to be more effective you should just ask them.

For example, using Nebraska bankruptcy exemptions :
(here’s a blog that has a full cheat on Nebraska Exemptions):

1. Do you have more than one vehicle?
2. Do you have more than $60,000 in equity in your home?
3. Do you have more than $5,000 in money and financial accounts, not including your retirement accounts?
4. Could you get more than $3,000 for all of your household goods at a garage sale?
5. Do you have anything else of value that I didn’t already cover?

Assignments for the Benefit of Creditors - A Bankruptcy Alternative

What Cannot Be Discharged

Finally, remind them what debts are included and to make sure to include every debt. This blog is intended for attorneys, so I know you all know these things already but like I said, this is sort of a checklist type blog so here is what I wish you all would just run down with them regardless:

1. Child Support – NEVER GOING NO WHERE
2. Alimony – NEVER GOING ANY WHERE EITHER
3. Some Taxes – Especially the ones that were incurred from small businesses that didn’t pay their employee’s payroll taxes.
4. Debts Incurred By Fraud
5. Debts Incurred for Damages Down While Intoxicated
6. Most traffic fines and fees and all BUT we can include reinstatement fees for driver’s licenses that were suspended in most states.

Don’t Forget To Tell Them the Process

Once the client knows all that and is still with you. Let them know the process. Click on this blog to check out our “Sample Workflow for Contract Bankruptcy Paralegals.”

This post was proofread by Grammarly.

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