When Should You Consult With A Restructuring Attorney

A couple times recently that people have asked me the same simple question and been surprised by the answer.

The question: “When should people call you?”

The answer: “When the first really bad thing happens.”

Let me give a little context. The first time I heard this question, it was from a consultant who was only vaguely familiar with a bankruptcy and restructuring practice. The second was from another attorney who has clients who might need my services. Both wanted to know at what point in someone’s life they should contact me. And both expected something to the effect of, “When debts are so bad that people are having trouble paying bills.”

You certainly can contact me then, but it would be better if you did it when you saw the first sign of financial trouble. That might be illness, job loss, hours being cut, divorce or anything else of the sort. You don’t have to wait for the train to hit you before you look for help. When you see the train coming and don’t know whether you might be able to get out of the way, that’s when you should call.

When I am involved early, we can look and see whether you might be able to avoid bankruptcy through some decisions. If bankruptcy is inevitable, we might have more flexibility about under what chapter to file, the timing of the filing, and some choices we can make. When I get involved as things are spiraling out of control, our options are often more limited. I personally don’t charge for initial consultations and often meet with people a couple times before they retain me.

So remember that you don’t have to wait for the train to hit you before you seek help.

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  2. If your non-exempt assets are not enough to cover your debts, bankruptcy allows you to discharge some of your debts, which means they do not have to be repaid. Under Chapter 13 bankruptcy filing, you will be given a new repayment plan that significantly lowers the amount you have to pay, and you will be given a set number of years in which you have to repay your debts.

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