File with or without a lawyer

[123boxie]

Hello, I have been plaguing the board with all kinds of questions and I been surfing the boards and finding all kinds of things I never knew. It makes it a lot more empowering.

Ok, I got 4 attorneys free consultations and then decided to go with a very slick firm that does lots of bankruptcies. the firm did an intake and asked me all my questions about equity. During that process if I said something was worth this much the attorney would prompt me to say is it really worth... I bet it is worth more like... at which point I would lower the value. The entire intake form was this way.

After that was done the attorney gave me a folder with the entire bankruptcy proceedings laid out and what was expected of us. Afterward I had some questions so I have emailed him several times and called him several times. He always answers and then states trust me and do as I say and this will be over soon.

Now I read the 341 messages board and there is all kinds of comments about attorneys screwing up the paperwork. Should I be concerned, I haven't actually paid any attorney yet. I have to wait and get some income we are expecting first and then I can handle it. Should we consider filing on our own? We are probably going to let one house go and keep the other and we have some things we wish to keep of value. It is somewhat complicated as we own an LLC and just reopened a new corporation to keep it all separate. What do you guys think?

Jen

[justbroke]

Yes, attorneys and even we mere pro se filers are mere mortals and are fallable. It happens. However, the attorney does give you the package before you sign it so that you can review it. I would not sign until all corrections are made. Most of the time, the debtor doesn't review his own paperwork, and ask the lawyer, after the fact of filing, to make changes.

So, yes there are some attorneys who do a poor job. In most of these cases, they are larger shops and the Paralegals are who really prepare the petition. Not to say that the paralegals don't do a good job, I think it's a combination of the diligence of the debtor and the attorneys (and their staff) in most cases.

Since you have an LLC (and I don't know if it's closely held, single-member or what), but you really need to go through an attorney.

[mtbc]

Certainly the regular bankruptcy guides I read don't say much about small businesses you may own. Having said that, if they're not actually worth much, and you can squeeze them in under wildcard exemptions or something, I'd expect that it's probably just a case of the trustee wanting to see accounts, other financials, etc. to be sure of the plausibility of your valuation.

I filed pro se partly because I knew I'd have a hard time finding a lawyer I truly trusted not to screw things up. But, despite that I'd taken various measures to make my case very simple by the time we filed, the effort to handle things myself consumed many days of time in total. Perhaps you could find an attorney that at least would go over the petition and schedules with you and let you ask questions before they are filed with the court, so you get at least some of a sense that they've not screwed things up.

[123boxie]

Our LLC is single member. We had credit cards in the LLC and my name that we are defaulting and including in the bankruptcy. however, we are not filing bankruptcy for the LLC. We are dissolving it as soon as we complete a contract we have open. It will probably be dissolved in May.

We did open an new Corporation. the attorney valued both our LLC and the corporation at zero since we can't be sure that we are going to have income in the future.

the other thing that turns my stomach in this entire situation is that we have one contract that is open under the LLC that is worth 20k, but there will be payroll and taxes taken out of that.

Then the corporation will also have about 30k coming from contracts, but again there will be expenses to be paid, such as payroll, insurance, and our paychecks of course, training courses, lots of things to spend the money on to run a corporation.

I was informed from the attorney the money due to both the LLC and the Corporation is not money due to us and is a separate issue.

If I were to wait for all this to settle we could be in June/July. I don't think that I can survive until then. We get so many calls daily. I also will not consider 13 because our income could go up or down and I would worry for every day until I was out of 13.

My husband says I'm over analyzing everything, but I simply don't trust in lawyers, they ultimately will not be the one punished. We will.

[justbroke]

I was informed from the attorney the money due to both the LLC and the Corporation is not money due to us and is a separate issue.

It is a separate issues as far as it's a separate entity; but, alas, it is also not "separate" when it's closely held. The problem is that the Trustee can step in the shoes of the Debtor and actually be the "single-member" and administer/run the LLC. Whether this would occur is whether the Trustee thinks it is juicy with assets (A/R is an asset) and whether the Trustee thinks it will make both he and the unsecured creditors some money.

That's the real problem with single-member LLCs. While a separate entity, the Bankruptcy Estate is special. Since you hold all shares, the shares actually belong to the Bankruptcy Estate. So, if that LLC owes "you" any money or profit based on it continuing to operate, the Trustee may see this as the Estate's money. However, accounting mechanisms may preclude the Trustee from taking A/R proceeds that were not actually accounted for, prior to the commencement of your case. This is the cash or accrual basis of accounting.

If there's really nothing there in the LLC, I wouldn't worry, and many times the Trustees don't want to even bother with it. But, alas, don't be surprised if you're asked questions about it in the 341 Meeting.

[mprevatt]

to answer your original question file with out without an attorney : I filed pro se because I have no assets to protect, (I literally have nothing but my kids)
but yours sound a lot more complicated. you should have an attorney to do it but ask for references or something before you hire somebody and pay the obscene amount of money they charge

i don't trust lawyers because in my divorce case my first attorney screwed things up for me, in fact he is the reason I filed Chapter 7, it's his fees I am trying to avoid, scumbag is trying to garnish my salary and has accomplished absolutely nothing in my divorce case. AND already got 10,000 and wants another 13,000. and I wasn't even divorced, when he dropped me for non payment ,,took another attorney to finish the job.

anyway, make sure the lawyer you hire is a good one. good luck!

[hedgecat]

I filed pro se because -

1. I'm not scared of the forms and wanted to know about the process
2. I keep great records
3. I personally met all means tests, etc. even though I declared that most of my debt was created through my sole proprietorship business
4. I had nothing complicated - no money owed to me, no weird business dealings on which I needed advice, etc.
5. Lately, it was just hard to even scrape up the $299 for filing, the $30 for the education course and the $50 for the software I used. No way I could have afforded the $1000 to $1700 quotes I was getting from attorneys.

Even though I was warned away from filing myself because of my business, I wasn't worried. If I had mitigating circumstances (like it seems you do), I'd probably think a little harder about filing on my own - however, I'd talk to an attorney who knows something about LLCs, small businesses and how they effect bankruptcy.

[HHM]

As with anything, it is time vs money. How much is your time worth, and do you really have the time to invest in doing your case "right". Most "problems" arise in pro se cases and the trustees hate pro se cases (more work) so in a practical sense, you put yourself at a disadvantage from the start.

Only you know if you have the diligence and time to learn to do a bankruptcy. The mistakes made in pro se cases usually come from debtor arrogance (not willing to truly invest the time) or pure debtor stupidity. Both of which can be solved with time or money.

Since you have an LLC with outstanding accounts receivable, yours is NOT a pro se case, you should hire an attorney that will help you navigate the minefields. Keep in mind, the attorney is hire to DO your bankruptcy, not TEACH you the ins and outs of bankruptcy. This is why many attorneys will not take the time to explain things in much detail, reasons being: (1) in the end, you don't care, (2) the explanation will only increase your anxiety and confusion, (3) you will only remember the bad portion.

[SleeplessMI]

I can't say enough good things about my attorney. I filed a no asset Chapter 7 with two incorporated business entities and four reaffirmations. I keep my own books and I know a little something about law, but I needed his experience with the BK process to hit that narrow slot between not enough money to reaffirm, and too much money for a Chapter 7. I wouldn't have dreamed of doing mine pro se--even if I could have handled the business issues, I've been under more than enough stress already. And no, generally an attorney won't review your petition and then have you file it yourself, because he can't control how you handle your case after he reviews it and could be subject to malpractice. (Reviewing pro se documents is called "unbundling," and is referred to in the profession as "malpractice waiting to happen.")

That potential large receivable of yours needs a lawyer. Get a referral from someone you trust (I got mine from a retired attorney who knows everybody in town), interview and choose carefully. Then trust but verify, and let him or her do the job.

[123boxie]

Not sure how to interview attorneys properly. The attorney that I have all but decided on has a very slick office. They have forms for everything and have a system of doing anything. He also just repeats the mantra "Do what I say and everything will be alright" They do hundreds of cases, maybe even thousands does that signify enough of a check.

Other than speaking with several attorneys and just getting a gut feel how would you know?

Thank you all, you are like a life line.

jen