Couple Couldn't Afford Bankruptcy Fees
An elderly couple had fallen behind on payments and creditors were ready to take anything they could from the couple. The couple looked for the “cheapest attorney they could find, but were unable to afford the fee,” so they did the best they could filling out the bankruptcy forms to protect themselves from creditors. Before filing, they paid a young attorney $100 to look over the forms and the attorney approved the forms.
Later the couple attended a meeting, which is required in all bankruptcy cases where Trustees question debtors on their assets. When their names were called, the couple, with the aid of a walker and cane, made their way to the front of the room. After they arrived, the questions began.
As in most bankruptcy cases, the Trustee turned his attention to the real estate that the couple owned. The couple had been living in their home for over 50 years! The Trustee asked how much the home was worth, and the couple responded “about $85,000 last I heard.” The Trustee then asked about the amount listed in their bankruptcy forms for what they owed on the property. The couple stated that they only owed about $3,000 on their home.
In a Chapter 7 bankruptcy case, the Trustee has one job- look for assets with equity that aren’t protected by exemptions and sell those assets for the benefit of creditors, regardless of how it affects debtors. The Trustee sat in silence for a moment, obviously knowing what was required by the bankruptcy code, but also thinking about the elderly couple living on the street.
The Trustee broke the silence by asking if an attorney prepared the paperwork. The couple told the Trustee that they couldn’t afford an attorney, but paid a young attorney to look at their forms. Another round of silence broke.
The Trustee began thumbing through the paperwork and asked the debtors if they brought proof of their social security number to the hearing, as is required. The couple urgently searched through their belongings only to realize that they had forgotten them. The Trustee told the couple that he had no other choice but to continue the hearing two weeks later, and if they did not appear, the case would be automatically dismissed. The debtors scrambled for a pen and paper and asked to clarify the case so that it would not get dismissed. The Trustee again relayed the information about the case being continued, but gave a wink. The debtors wrote down the date.
The Trustee gave the couple a way out of a terrible situation. The Trustee could not tell the couple not to appear so the Trustee told the couple what would happen if they didn’t show up. The Trustee told the couple about his role in the bankruptcy and how he would have to take their home. Keep in mind, the Trustee did not have to do this and could have forced the debtor to produce the required proof to proceed with the sale of their home. However, the couple left the meeting with their home, and a state of confusion.
Prevent This Horror Story From Happening To You!
This horror story could have gone much worse, but situations like this occur because people believe that it is cheaper to file bankruptcy on their own. In this case, it would have cost the couple $82,000 of equity to get a discharge, and a loss of shelter, which is quite expensive when you compare that to a fee of an experienced and qualified bankruptcy attorney.
Don't be discouraged by what may seem like high attorney fees to file your bankruptcy. You will have normally end up with more money in your pocket and keep your assets when you file bankruptcy with an experienced attorney.
Give me a call today for a free consultation at (757) 320-2010.
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