A Brief Description of the Types of Bankruptcy

Chapter 7: Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts. Under chapter 7 a trustee takes possession of all your property. You may claim certain of your property as exempt under governing law. The trustee then liquidates the property and uses the proceeds to pay your creditors according to priorities of the Bankruptcy Code. The purpose of filing a chapter 7 case is to obtain a discharge of your existing debts. If, however, you are found to have committed certain kinds of improper conduct described in the Bankruptcy Code, your discharge may be denied by the court, and the purpose for which you filed the bankruptcy petition will be defeated. Even if you receive a discharge, there are some debts that are not discharged under the law. Therefore, you may still be responsible for such debts as certain taxes and student loans, alimony and support payments, criminal restitution, and debts for death or personal injury caused by driving while intoxicated from alcohol or drugs. Under certain circumstances you may keep property that you have purchased subject to valid security interest. Your attorney can explain the options that are available to you.

Chapter 13: Chapter 13 is designed for individuals with regular income who are temporarily unable to pay their debts but would like to pay them in installments over a period of time. You are only eligible for chapter 13 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code. Under chapter 13 you must file a plan with the court to repay your creditors all or part of the money that you owe them, using your future earnings. Usually, the period allowed by the court to repay your debts is three years, but no more than five years. Your plan must be approved by the court before it can take effect. Under chapter 13, unlike chapter 7, you may keep all your property, both exempt and non-exempt, as long as you continue to make payments under the plan. After completion of payments under your plan, your debts are discharged except alimony and support payments, student loans, certain debts including criminal fines and restitution and debts for death or personal injury caused by driving while intoxicated from alcohol or drugs, and long term secured obligations.

Chapter 11: Chapter 11 is designed for the reorganization of a business but is also available to consumer debtors. Its provisions are quite complicated, and any decision by an individual to file a chapter 11 petition should be reviewed with an attorney.

Chapter 12: Chapter 12 designed to permit family farmers to repay their debts over a period of time from future earnings and is in many ways similar to chapter 13. The eligibility requirements are restrictive, limiting its use to those whose income arises primarily from a family – owned farm.

SERVICES AVAILABLE FROM CREDIT COUNSELING AGENCIES

If you’re not disciplined enough to create a workable budget and stick to it, can’t work out a repayment plan with your creditors, can’t keep track of mounting bills, or need more help with your debts than can be achieved by merely having a few of your unsecured creditors lower your interest rates somewhat, it makes NO sense to consider contacting a credit counseling organization. If, on the other hand, you meet all of those criteria, there are many non-profit credit counseling organizations are nonprofit that will work with you to solve your financial problems. But just because an organization says it is “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, which may be hidden, urge consumers to make “voluntary” contributions that can cause more debt, urge consumers to enter “debt repayment plans” they simply cannot afford.

Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, it probably best to find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.

Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Legitimate counselors will discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

If your financial problems stem from too much debt or your inability to repay your debts, a credit counseling agency may recommend that you enroll in what is known as a “debt management plan” or “DMP”. A DMP alone is not credit counseling, and DMPs are not for everyone. You should sign up for one of these plans only after a certified credit counselor has spent time thoroughly reviewing your financial situation, has offered you customized advice on managing your money, and has analyzed your budget to make sure that the proposed DMP is one you can afford. However, remember that all organizations that promote DMP’s fund themselves in part through kickbacks from the creditors involved, which are called “fair share”, so you have to be wary as to whose best interest the counselor has in mind. Even if a DMP is not appropriate for you, a reputable credit counseling organization still can help you create a budget and teach you money management skills.

In a DMP, you deposit money each month with the credit counseling organization, which uses your deposits to pay your unsecured debts, like your credit card bills and medical bills, according to a payment schedule the counselor develops with your creditors. Your creditors may agree to lower your interest rates or waive certain fees, but it’s always best to check with all your creditors, just to make sure they offer the concessions that a credit counseling organization is promising you. A successful DMP requires you to make regular, timely payments, and could take 48 months or more to complete. Ask the credit counselor to estimate how long it will take for you to complete the plan. You may have to agree not to apply for — or use — any additional credit while you’re participating in the plan, and a DMP is absolutely useless if your problems stem from or involve your secured creditors holding your car, truck or home as collateral. DMP’s are also useless if your problems stem from alimony, child support or overdue taxes.

The bottom line is this: If all you need is a little lowering of your interest rates on some unsecured debts, a DMP might be the answer. However, if what you really need is to reduce the amount of your debt, bankruptcy may be the only solution.

EXPLANATION OF MEANS TESTING

Before your case can be filed, it is subject to what is called “Means Testing”. The Means Test was designed to determine whether or not you qualify to file a case under chapter 7 of the Bankruptcy Code, and if not, how much you need to pay your unsecured creditors in a chapter 13 case. For purposes of means test, you must state, after reasonable inquiry, your total current monthly income, the amount of all expenses as specified and allowed pursuant to section 707(b)(2) of the Bankruptcy Code, and if the plan is to file you in a Chapter 13 case, you must state, again after reasonable inquiry, your disposable income, as that term is defined.

YOUR DUTY TO PROVIDE ACCURATE AND COMPLETE DISCLOSURE

Some or all of the information you provide in connection with your bankruptcy will be filed with the bankruptcy court on forms or documents that you will be required to sign and declare as true under penalty of perjury.

All information that you are required to provide with the filing of your case and thereafter, while your case is pending, must be complete, accurate and truthful.

All your assets and all your liabilities must be completely and accurately disclosed in the documents filed to commence your case.

Some places in the bankruptcy code require you to determine and list the replacement value of an asset such as a car, or furniture. When replacement value is required, it means the replacement value, established after reasonable inquiry, as of the date of the filing of your bankruptcy case, without deduction for costs of sale or marketing. With respect to property acquired for personal, family or household purposes, replacement value means the price a retail merchant would charge for “used” property of that kind considering the age and condition of the property.

Information that you provide during your case may be audited pursuant to the provisions of the Bankruptcy Code. Your failure to provide complete, accurate and truthful information may result in the dismissal of your case or other sanctions, including criminal sanctions.

A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of perjury in connection with a bankruptcy case shall be subject to fine, imprisonment, or both. All information you provide in connection with your bankruptcy case is subject to examination by the Attorney General.

REQUIRED DISCLOSURES UNDER THE BANKRUPTCY REFORM ACT MANDATED BY 11 U.S.C.§527(B).

IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER.

If you decide to seek bankruptcy relief, you can represent yourself, you can hire an attorney to represent you, or you can get help in some localities from a bankruptcy petition preparer who is not an attorney. THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. Ask to see the contract before you hire anyone.

The following information helps you understand what must be done in a routine bankruptcy case to help you evaluate how much service you need. Although bankruptcy can be complex, many cases are routine.

Before filing a bankruptcy case, either you or your attorney should analyze your eligibility for different forms of debt relief available under the Bankruptcy Code and which form of relief is most likely to be beneficial for you. Be sure you understand the relief you can obtain and its limitations. To file a bankruptcy case, documents called a Petition, Schedules and Statement of Financial Affairs, as well as in some cases a Statement of Intention need to be prepared correctly and filed with the bankruptcy court. You will have to pay a filing fee to the bankruptcy court. Once your case starts, you will have to attend the required first meeting of creditors where you may be questioned by a court official called a ‘trustee’ and by creditors.

If you choose to file a chapter 7 case, you may be asked by a creditor to reaffirm a debt. You may want help deciding whether to do so. A creditor is not permitted to coerce you into reaffirming your debts.

If you choose to file a chapter 13 case in which you repay your creditors what you can afford over 3 to 5 years, you may also want help with preparing your chapter 13 plan and with the confirmation hearing on your plan which will be before a bankruptcy judge.

If you select another type of relief under the Bankruptcy Code other than chapter 7 or chapter 13, you will want to find out what should be done from someone familiar with that type of relief.

Your bankruptcy case may also involve litigation. You are generally permitted to represent yourself in litigation in bankruptcy court, but only attorneys, not bankruptcy petition preparers, can give you legal advice.

REQUIRED DISCLOSURES UNDER THE BANKRUPTCY REFORM ACT MANDATED BY 11 U.S.C. §528(a)(1)

FREE INITIAL CONSULTATION AGREEMENT

You (“Client”) are hereby requesting the opportunity to consult with and obtain information and advice from the Stephend Fiddes McGill & Associates, P.C. (“Law Firm”) regarding relief from debts, including relief from debts by filing bankruptcy under the United States Bankruptcy Code. This agreement is for purposes of that initial consultation only. If at the end of the Free 20 minute Initial Consultation, the parties agree that the Attorney is to provide any additional services short of being retained to file a bankruptcy, the parties shall attach an addendum to this contract setting forth the additional services the Attorney is to provide to the Client, the obligations of the Client, and the Attorney’s fees for such services. If the Client retains the Attorney to file a bankruptcy, the parties shall execute a separate contract setting forth the fees and other terms of such representations. With respect to the consultation, the parties agree as follows:

There is no fee for the completion of the forms and discussion of your financial situation. In the event that Client wishes to hire Attorney for any purpose other than a Limited 20 Minute Free Initial Consultation then a separate agreement must be executed by all parties.

Law Firm shall provide the Client the following services:

Analyze the client’s financial circumstances based on information provided by the Client.

To the extent possible, based on the information provided by the Client, advise the Client of the Client’s bankruptcy options and non-bankruptcy options.

Advise the Client of the requirements placed upon the Client to file a chapter 7 or 13 bankruptcy.

To the extent possible, quote the Client an estimated fee for the Law Firm’s services to provide bankruptcy assistance or other legal services to the Client.

There is no obligation on the part of the client to tender any fees for the initial consultation.

The Law Offices of Stephens Fiddes McGill & Associates, P.C. is proud to be designated as a Federal Debt Relief Agency by an Act of Congress and the President of the United States and is able to assist consumers seeking relief under the U.S. Bankruptcy Code.

When you’re considering hiring a Social Security lawyer, you’re likely curious about how much they can charge for their services. While the federal limit is set at 25% of your back pay, up to a maximum of $6,000, this isn’t the whole story. Different states might have their own caps, and lawyers can also include additional fees for costs incurred during the case. Understanding these nuances is crucial because they can significantly impact the final amount you pay. But how do these fees stack up in practice, and what should you watch out for to avoid overpaying?

Overview of Legal Fee Limits

When hiring a social security lawyer, it’s important to understand that their fees are not without limits. The legal fee regulations set specific boundaries to ensure fairness and accessibility. You’ll find that there are hourly rate limits which cap how much your lawyer can charge per hour. These caps are not arbitrary; they’re designed to prevent exploitation while ensuring competent legal representation.

Additionally, each state may have its own specific guidelines that further tailor these financial boundaries. It’s crucial to familiarize yourself with these state-specific guidelines to make sure you’re not overpaying. You can usually find this information through your state’s bar association or by consulting directly with prospective lawyers who should be upfront about these regulations.

Lastly, the attorney-client agreements you sign before formalizing the partnership with your lawyer will outline all fees. These agreements are your safeguard, detailing the maximum allowable fees and helping you understand exactly what financial obligations you’re committing to. Make sure to read these documents carefully; they are key to avoiding unexpected charges and ensuring the lawyer’s fees are within the legal limits. Always remember, these regulations exist to protect you as a client.

Common Fee Structures

Social security lawyers typically utilize one of several fee structures, and it’s essential you understand each type to effectively manage your legal expenses. Delving into fee negotiation strategies can empower you to secure a fair deal. For instance, understanding retainer agreements ensures you’re clear about initial costs and what those cover. This clarity often avoids surprises down the line.

Client success stories highlight how negotiations can adjust fees based on the complexity of the case. If your situation involves intricate medical records or multiple appeals, expect the fees to reflect this complexity. Here, the role of legal assistants becomes pivotal. They handle much of the preparatory work, potentially keeping costs down by reducing the hours a lawyer needs to directly spend on your case.

Moreover, comprehending the impact of case complexity on fees helps you anticipate potential costs. More complex cases require extensive research and documentation, which in turn increases the workload and the necessary resources. It’s smart to discuss these aspects upfront with your lawyer, ensuring you both have a clear understanding of the expected workload and how it affects your agreement. This transparency helps prevent misunderstandings and fosters a stronger client-lawyer relationship.

Contingency Fee Basis Explained

Often, social security lawyers work on a contingency fee basis, meaning they only get paid if you win your case. This payment structure is designed to minimize your financial risk when seeking legal representation. With a contingency fee, your lawyer’s payment is a percentage of your awarded benefits, which ensures their motivation aligns with your success.

Before diving into this arrangement, it’s crucial you understand the specifics laid out in the client agreement. This contract will detail the percentage your lawyer will take and under what conditions. Typically, fee negotiations occur early in your engagement, providing clarity and preventing surprises down the line. It’s important that you feel comfortable with the terms, as this person will be representing your interests.

Additional Possible Charges

You should also be aware of other possible charges that might not be covered under the contingency fee. Beyond the standard percentage your lawyer takes after a successful claim, there could be additional fees that pop up throughout the process. It’s crucial to inquire about potential expenses like administrative costs. These might include charges for copying documents and obtaining medical records, which can add up quickly.

Consultation charges may also apply, especially if you require extensive discussions or additional meetings beyond the initial evaluation of your case. If your case encounters complications or requires an appeal, appeal fees can become another financial burden. These fees are usually separate from the initial contingency plan and could vary depending on the complexity and length of the appeal process.

Always ask for a detailed breakdown of any additional fees and how they’re calculated. Being informed about these potential expenses will help you budget better and avoid surprises down the line. Remember, every lawyer’s fee structure is different, so clarifying these details upfront will ensure you’re both on the same page and help you manage your expectations concerning the overall cost of pursuing your claim.

Factors Affecting Overall Costs

Understanding the factors that influence the overall costs of hiring a Social Security lawyer is key after considering potential additional charges. The experience of your lawyer plays a significant role. Seasoned lawyers with a wealth of experience typically charge more, but they might also resolve your case quicker and more effectively. The complexity of your case also dictates the cost. Simpler cases might not require extensive hours or additional resources, keeping fees lower compared to more intricate legal battles.

Your location affects costs too. Lawyers in larger cities or regions with a higher cost of living often have higher rates. It’s essential to consider how much you can afford—your budget matters. Don’t shy away from discussing your financial limits with potential lawyers. They might offer flexible payment options or adjust consultation fees.

Speaking of consultation fees, these can vary widely. Some lawyers might offer a free initial consultation, while others charge a flat fee or hourly rate just to review your situation. It’s crucial to understand these fees upfront to avoid surprises and align your choices with your budget and the specific demands of your case.

In conclusion, a Social Security lawyer’s fees are generally capped at 25% of your back pay, up to $6,000. While most lawyers work on a contingency fee basis, meaning they only get paid if you win, it’s crucial to understand all potential charges. Be sure to review your attorney-client agreement closely to grasp the full extent of the costs you might incur. Remember, being informed helps you make the best decision for your case.