Prospective Clients' Mistaken Assumptions in Filing Chapter 7

Sometimes I receive a phone call from a person stating "I want to file a chapter 7. What are your fees?" They ask the question as if they know for sure they will file a chapter 7. I then explain to them I know nothing about them. I don't know about any assets they may have or other issues they may have. Sometimes they say something that makes no sense and hang up. Other times, I am able to ask a few questions.

Usually before I even have a chance to ask a question, the person will say "I have no assets". I still need to ask them questions to find what issues they may have in bankruptcy.

Here are some examples of information I found on some prospective clients who claimed they had no assets, but my question showed they had some issues.

I had prospective clients in the past that had no assets but I found out that they were due some money from workers compensation, inheritance, or some other matter. The prospective clients then usually mentions, "this is so complicated".  In fact, this is not complicated

Worker's compensation can be exempt if you file in Ohio before you receive it. If you receive an inheritance, then it is properly the property of the estate. If you receive the inheritance before you file and spend it down on reasonable necessary expenses, then that is ok.

In another instance, a prospective client told me they had no assets. But after my questioning of him, it turned out he paid his children back some money he owed them. This is called an insider preference.

So some prospective clients who call and inquire about the price of filing a chapter 7 and think they will file a chapter 7 are mistaken. They don't understand all the inner workings of the bankruptcy code. I usually don't hear back from them. I don't know what happens to them. I guess they may go to another attorney and try to keep that part hidden. So here is a bit of advice for some people who may be tempted to hide things from their attorneys. It is a crime to intentionally hide a fact from the filing of your bankruptcy. Yes, you can even go to prison for that.

Next time as a prospective client, if you decide to call up an attorney and tell him/her what you want to do, it is a good idea to no do that. But let the attorney do the talking and explain to you how bankruptcy works. Don't assume things and get into trouble.

If you need some advice on fling for bankruptcy, contact us at Hausen Law, LLC. We have offices in Akron, Canton, Wooster and New Philadelphia.  We serve all of Northeast Ohio.

Submitted 5/7/2015