From a recent episode of Legal Action which airs on Comcast Cable in the Chicago area, David M. Siegel discusses two common, but important questions regarding filing for bankruptcy. The first is the financial management instruction requirement that must be completed post-filing. The second is the typical range of fees that one could expect to pay for bankruptcy representation.
Interviewer: Let me ask you this. We did the pre-requirements, we filed the petition, and I’m going to go to a meeting.
Interviewer: You talked a little bit earlier about the debt management course, which was a precursor before you can actually file your petition for bankruptcy or Chapter 7.
David Siegel: Right.
Interviewer: Is there anything else that’s required after that?
David Siegel: Yes, there is one requirement after your file and that’s you have to take a two hour personal financial management instruction course. This is again is something the government has put into place in the 2005 law change that basically said you’re going to take credit counseling before you file, and you’re going to take financial management instruction after your file to actually get your fresh start. What this course is it covers everything from insurance, purchasing a car, banking, smart decision financially. A lot of this stuff was covered in high school courses and collegiate courses. But it’s just another reminder to avoid some of the scams, take responsibility for what you do, make smart decisions. Most of the clients have said that they do pull something valuable out of this two hour course, and there’s also a little quiz that they have to take at the end. The government mandates that they pass this quiz. If they don’t pass the quiz the provider just needs to give them a little bit more counseling, talk to them over the phone, explain what area they fell short in. But typically most of the clients get 100 percent. So you can tell it’s not a difficult quiz, but they’re just trying to protect people going forward so that they don’t fall into these same traps.
Interviewer: What can I expect to pay for a Chapter 7 bankruptcy?
David Siegel: The fees for bankruptcy are going to vary. It’s wide spread; it’s anywhere from $700 to $800 at the low end, $2000 or more at the high end, and we’re talking about a service here so you’re really paying for that service. Some attorneys give you very little treatment, very little explanation, very little help. Other attorneys help you all the way through. They make it a smooth process for you, they take care of most of everything for you, and of course there’s a different level of expertise between a novice attorney or an attorney with very few years of experience, and then someone who’s got 20 to 25 years’ experience who has seen a wide range of issues. So you’re paying up in certain cases for a more knowledgeable, more experienced attorney, but it ranges. So I tell people to shop around. You often get what you pay for, but not always. Sometimes you overpay for bad service, and you got to be very careful. So I recommend clients look on the Internet, look at some of the reviews, check out the websites, and most importantly visit that attorney’s office, meet with that attorney, see what he’s all about or she’s all about. Get a feel for whether your questions were answered. Was the staff helpful? Did the office look presentable? Did they look like they were doing business there? Are they doing bankruptcy and injury and divorce and foreclosure? Are they really primarily a bankruptcy law firm? So it’s very important. I say you go to a specialist.
