Q 1: What kind of bankruptcy relief is available to me?
A. If you are the typical sort of working person, you are a “consumer” and you may be eligible for Chapter 7 or Chapter 13 relief. When you file Chapter 7, your lawyer assumes that you have few or no valuable assets, that your income is generally below the state median, and that you have little or no disposable income after your living expenses are met. Under Chapter 7, all of your unsecured debts are wiped out, but any debt secured by collateral (such as a car or house) must be dealt with separately. If you have money or valuable property, the court may decide to take it from you and sell it to pay your creditors. Chapter 13 is a repayment plan for people who now have enough income to make a monthly payment on their debt. The payment plan is administered by an agent of the court (a “trustee”), and the amount of payment depends on the amount of debt and the value of your estate. Often, you can use a Chapter 13 to save property, such as a house that is going into foreclosure or a car that is about to be repossessed.
Q 2: How much will it cost me to file bankruptcy?
A: That depends on the kind of bankruptcy you file and the amount of work involved. Typically, you might expect to pay between $600 and $800 for a Chapter 7, plus $299 for court filing fees. You will also have to pay for credit counseling, around $50. To file a Chapter 13, the fee allowed by the court is between $2500 and $3000, with a $274 filing fee; but in a Chapter 13, you don’t pay the fee all at once – you may have to pay $600 or $700 in legal fees before filing, but the rest is paid through the Chapter 13 repayment plan.
Q3: Is it very complicated to file a bankruptcy?
A: Since the reform laws that went into effect in October 2005, bankruptcy is more complicated than it used to be. For example, you now have to have credit counseling before you can file, and you need to have income tax records and old paystubs to convince the court that you are telling the truth about your income. Your lawyer knows these rules and can help you with them – this is why it’s important to have a lawyer when you file.
Q 4: What are the alternatives to bankruptcy?
A: Some firms offer “debt consolidations” in which you make one monthly payment and the consolidator pays off your debts a little at a time. How well that works is subject to debate. Another approach is to do a debt negotiation, which some lawyers can do for you. In the debt negotiation, you offer to settle each debt, one at a time, for somewhere between 25c and 50c on the dollar. If a creditor accepts your offer, you must pay that amount immediately. Obviously, if you have no money in the bank, you cannot do a debt negotiation. The final solution is to simply sell everything you have, pay off your creditors, and start all over again, perhaps in a different city. As you can see, these alternative solutions are not for everyone.
Real Estate
Q 1: Why do I need an attorney to buy or sell real estate?
A: Legally, you don’t, but it’s a good idea, especially if you’re the seller. Most of the paperwork in a real estate deal is the responsibility of the seller or whoever is working for the seller. In some cases, the seller’s real estate agent prepares the closing, but to minimize risk, it’s usually better to have a trained attorney order the title and prepare all the closing documents. If you’re the buyer, there’s a little less for your attorney to do, but he or she still has to coordinate the closing with the other parties and walk you through the many documents you must sign at closing.
Q2: What does it cost to hire an attorney for a closing?
A: The cost is minimal, usually between $300 and $500, depending on how much work needs to be done. If your attorney has to file actions to quiet title or settle a boundary dispute, obviously you will have to pay for the legal work involved.
Q 3: Can a real estate lawyer do anything other than closings?
A: As suggested in the previous question, your lawyer can help with a number of matters. If you do not have clear title to your land, the lawyer can file an action to quiet title. If you wish to sell your share of a parcel that you own with someone else, your lawyer can file a petition for partition. If you and another person are involved in a boundary dispute, your lawyer can petition the court for a declaratory judgment. These are just the most common actions. Call us for more information!
Wills, trusts and probate
Q1: Do I need a lawyer to write a will?
A: Legally, any document that you write that is witnessed by two persons can be your will. You can get do-it-yourself will kits at an office supply store. But why risk having something go wrong with your estate plan after you are dead? A trained attorney knows the law and can draft your will in such a way as to minimize the risk of having your will declared invalid by the court.
Q 3 : If my relative dies without a will, how do I get my share of the estate?
A: Whether someone has a will or not, the next of kin or any person with a financial interest can file a probate case to distribute the estate according to the law. A probate case filed without a will is called an “intestate” estate case, and it is administered much like any other estate, except that state law specifies who is entitled to how much. In a case where the deceased person’s estate is very small, an affidavit of small estate administration may be all that is required.
Q 3: Can I put my property in trust to avoid having it go through probate?
A: In many cases, you can. One way to do this is through a living trust. If you own real estate or personal property that you want distributed after your death, you can create a living trust and deed your property into it. (Property that you do not own cannot be put into the trust.) Usually, you will be the trustee of your own trust until you die or become incapacitated. Then a person you designate becomes trustee. The property is distributed after your death, either immediately or at a fixed time. At least two legal documents must be created to set up this kind of trust. Your lawyer can help you to decide whether this is the best course for you.
Q 4: How do I get guardianship over another person?
A: If you are involved in the care of a minor or a disabled adult, your lawyer can help you to petition the court for guardianship. You need not be a blood relative, but you must show the court why that person needs guardianship and why you are the best person for the job. Usually, you cannot get guardianship of a minor who has at least one living parent unless that person is absent or is unwilling or unable to care for him or her. You can get guardianship of a disabled adult provided the court concludes that the person needs a guardian and that you are the one best able to serve. Guardianship involves a great deal of responsibility and does not allow you to do whatever you want with your ward and with his or her money.
For more information on these or any other concerns, call Charles R. Wolf & Associates.
