Who needs to know?

[Ineedhelp2]

I talked with another BK attorney today, and surprisingly this one thinks I can do a chapter 7 instead of chapter 13.

Either way, he said he would have to notify someone who is on a contract with me.

I have a partner in a pending deal, and I don't know what she will think, or if she will be worried she will be at any risk. She is entirely outside of the bk scenario, and the contract will be honored by me, of course. But it still bothers me that she needs to know.

Other than that, who else needs to know? Will a bk affect my relationship with any other potential business partners or business deals? Does the IRS and other government agencies need to be notified?

BTW, can any income taxes be eliminated in a bk?

[lrprn]

I talked with another BK attorney today, and surprisingly this one thinks I can do a chapter 7 instead of chapter 13.

That's the beauty of interviewing 3-4 bk lawyers - you can find differences between them that can be to your advantage!

Either way, he said he would have to notify someone who is on a contract with me. I have a partner in a pending deal, and I don't know what she will think, or if she will be worried she will be at any risk. She is entirely outside of the bk scenario, and the contract will be honored by me, of course. But it still bothers me that she needs to know.

If you know there's a possibility that money is coming from the pending deal, you must list it as an asset on your forms. This means this partner will be on your creditor list and will be notified when you file.

Other than that, who else needs to know? Everyone who is required to know - otherwise it's totally up to you. Will a bk affect my relationship with any other potential business partners or business deals? It's possible if they find out somehow. However if you don't have a deal in the works when you file, they don't have to know you filed. And unless they are scanning the paper and accidentally happen to see your name there as a filer (filing is public knowledge) or you tell them yourself, they won't know. Does the IRS and other government agencies need to be notified? Only if you owe the IRS or other government agencies money.

BTW, can any income taxes be eliminated in a bk? Yes if the taxes meet these five requirements:
1. The due date for filing a tax return is at least three years ago.
2. The tax return was filed at least two years ago.
3. The tax assessment is at least 240 days old.
4. The tax return was not fraudulent.
5. The taxpayer is not guilty of tax evasion.

Hope this helps!

[GoingUnderInNV]

Along those same lines, does one's landlord need to know? Are they really a creditor, given the rentor/rentee relationship is a pay-up-front relationship, and not a credit-based relationship?

[Ineedhelp2]

Thanks for your comments, lrprn. I appreciate the time you take to help me and others.

It WAS good that I went to another attorney. Not only did I learn that I am a likely candidate for Chapter 7, since he was more inclined to put a lower value on my home, and discussed the costs which would be involved in the sale (the other attorney did not seem to be interested in looking at all the angles and possibilities), but I also learned that if it had to go to Chapter 13 that I would be in very good shape and nowhere near a 100% payback as the other attorney seemed to imply. Plus he shared that the chapter 13 trustee I would work with is very liberal in determining home values and would be inclined to accept our evaluation.

But...I think I should talk to at least one more attorney. This fellow is thorough and competent, but I don't like him. Not that I couldn't still work with him--but I'm hoping to find someone I feel a little more comfortable with, plus I should get some more input.

Is it usual that bk attorneys have a free first meeting? So far I was charged $40 for one and the second recent one was free.

Also, what is the usual cost for a chapter 7?

I believe that the attorney wants $1,400 plus there would be about $300 in court costs. Is this about right?

Do attorneys charge more than this for consultation? I really would like to discuss my situation much more thoroughly than I have so far. Is that type of thing usually included in their flat fee?

[lrprn]

Thanks for your comments, lrprn. I appreciate the time you take to help me and others.

You're welcome, INH2 - thanks for letting me know it helped.

Is it usual that bk attorneys have a free first meeting? So far I was charged $40 for one and the second recent one was free.

Yes, for now at least, most are still offering a free half-hour to hour consultation. However, now that the new law is making filing bk more form-heavy and much more complicated than it was before last October, some lawyers are starting to charge a nominal fee like yours that charged you $40. And a few charge as much as $500 for the first hour.

Also, what is the usual cost for a chapter 7? I believe that the attorney wants $1,400 plus there would be about $300 in court costs. Is this about right?

Overall, before the new law went into effect last October, typical prices for a Ch 7 were around $1000. Now it's averaging around $2000. There's variability across the country depending on what the cost of living and what the standard lawyer fee is per hour for your area. Yours seems to be a little below the national average.

Do attorneys charge more than this for consultation?

Lawyers usually set their charges close to the average of what their fellow lawyers in the area charge for the same services combined with what the typical client is willing to pay for those services. Bk is NOT the time to go with the lowest bidder!

I really would like to discuss my situation much more thoroughly than I have so far. Is that type of thing usually included in their flat fee?

We went into each interview with a written list of questions plus a detailed spreadsheet listing all our assets, income, expenses, and debts. This allowed us to squeeze in a fair number of more detailed and specific questions in during our three free consultations, and each lawyer answered them. However, it was after we paid our lawyer his retainer that we got down into the real nitty-gritty of our case. It just wasn't possible to get there with only an hour each time before that.

Hope this helps!

[SinkingFast]

Along those same lines, does one's landlord need to know? Are they really a creditor, given the rentor/rentee relationship is a pay-up-front relationship, and not a credit-based relationship?

Landlords go on Schedule G. Unexpired Leases and Contracts.

Our attny says our Landlord won't get notified. If they were gonna get that letter, I wanted to tell them personally myself before hand.

BUT I have read, there are some BK Software programs attnys use that automatically add "creditors" from Schedule G to the Creditor's Matrix. So you might ask your attny what's gonna happen in your particular case.

[Ineedhelp2]

Does a notice about my BK have to be placed in a local paper?

If so, I live in a small town and everybody I know will know about it eventually.

[lrprn]

Does a notice about my BK have to be placed in a local paper?

If so, I live in a small town and everybody I know will know about it eventually.

Bankruptcy is a public record. However, bankruptcies are typically published in the paper in the city where you file. Are you filing in your hometown or in a nearby larger city?