Interested in learning more about what a bankruptcy lawyer does and how to become one? This guide has got you covered!
Accumulating debt is easier than people think. With student loans, car payments, mortgages, credit card bills, and other expenses, it’s not uncommon for people to borrow more money than they can return.
This situation, however common, is extremely nerve-wracking and overwhelming! There are few options left for people at this stage, and the fear of what might happen next can cause panic and irrational decisions.
Fortunately, there are professionals who know exactly how to handle these circumstances! Bankruptcy lawyers intervene in financial crises to help people who are trapped by their debts.
If this career sounds like the right fit for you, read on to learn more about how to become a bankruptcy lawyer, their responsibilities, and their career outlook.
Before delving into the specifics, here’s a general overview of the bankruptcy law profession:
Oftentimes, people mistake bankruptcy lawyers for magicians. They believe these professionals can swoop in and make all of their debt disappear like it never existed.
However, bankruptcy law is not this simple! If it was, everyone would be declaring bankruptcy! The process of declaring bankruptcy depends on the type of debt you have and your ultimate goals. There are three main types of bankruptcy that clients typically declare:
Before delving further into the types of bankruptcy that lawyers assist with, it’s important to define two words: debtors and creditors. Debtors are those in debt, whereas creditors are the parties that are owed money. Lawyers may represent either party.
Chapter 7 bankruptcy, also known as liquidation bankruptcy, is one of the most common forms that requires you to liquidate all of your assets to pay back creditors. Out of the three main types of bankruptcy, this is the fastest course of action.
Another popular form of bankruptcy is a Chapter 13 filing. This form is a little more complicated but avoids property foreclosures. Debtors are given longer periods of time to make their mortgage payments if they are unwilling to liquidate their homes.
This filing is most commonly used for businesses. It is similar to Chapter 11 in that it allows businesses to stay open instead of liquidating. These businesses opt for longer payment plans, and the process to attain them is very complex. Attorneys are involved in these cases for years and typically charge extra to represent corporations.
Lawyers help clients file the appropriate type of bankruptcy, depending on their situation and advise them on all of their options. They collect the necessary documents to negotiate agreements that help their clients become debt-free.
Understanding the basics of bankruptcy law is an important part of assessing if it’s a good career for you. To further solidify your decision, you should also consider how long and arduous the journey will be to join this profession!
Ironically, becoming a bankruptcy lawyer will likely leave you with your own pile of debt in the form of student loans, which you should factor into your decision.
Here are the steps required to become a bankruptcy lawyer:
You’ll have to complete at least two degrees to join this profession. The first is an undergrad at an accredited university.
While some bankruptcy lawyers major in business, finance, or accounting to gain a better understanding of financial management, business planning, and credit planning, this degree is not required to get into or thrive in law school.
Depending on the law school you join, there will likely be a bankruptcy concentration or several courses that can give you an in-depth understanding of the essential laws and procedures involved in bankruptcy law. Accordingly, it’s better to choose a major you’re interested in so you can maintain high grades and gain a broader skill set.
Law schools understand that while high grades may make you a better student, they won’t necessarily make you a better lawyer. There are other competencies and skills admissions committees will look for to assure you’re a well-rounded candidate.
These qualities are mainly assessed through your resume. Your resume will include all work, volunteer, and extracurricular experience you’ve pursued during your undergrad, so it’s essential you keep busy and pursue diverse opportunities.
The LSAT exam is viewed as the best tool to predict students’ academic performance in law school. As such, it’s an essential part of the application process and should be given adequate time and effort.
Research your top schools’ LSAT medians and set a target score range that will ensure you’re a competitive candidate. Use the difference between your diagnostic score and target score to build the perfect study schedule to bridge this gap.
It’s suggested that students apply to at least 10 law schools of varying competitiveness to give themselves the best chance of admission to at least one. If you submitted a stellar application, maintained a high GPA, and reached your target LSAT score, you should receive several offers.
Consider your options carefully. Factor your budget, location, and career goals into your decision because the law school you choose will have a major impact on your post-graduation job prospects. Look for a school that can offer you the best education and experience to meet your specific needs and goals.
This part of your journey is where you’ll acquire the most debt! To heed the advice you’ll eventually be giving your clients, manage your finances wisely and consider applying to internal and external scholarships to ease some of your financial burden.
Most states require law students to prove they understand the ethical and professional guidelines that lawyers must follow by passing the MPRE. Students typically write this exam while they’re still completing their JD.
This step is optional and considering several programs allow students to concentrate in bankruptcy law, more lawyers are opting out of obtaining this degree.
An LLM in Bankruptcy Law can give you more specialized expertise in this legal area, which can lead to higher pay potential and more job opportunities. This program takes one year to complete but can be quite costly, depending on the program you choose.
At the end of this seven- to eight-year journey, the final step you’ll have to complete is passing the bar exam. This is a licensing exam that proves you have the necessary knowledge and skills to practice law as an independent attorney.
This exam is known to be challenging, so it’s important you dedicate enough time to preparing for it! It’s not the type of exam you can just wing and having to retake it can set you back or prolong your journey to becoming a bankruptcy lawyer.
The final component to consider when discussing how to become a bankruptcy lawyer is their salary. Bankruptcy lawyers make an average of around $141,206 a year. This salary can increase or decrease depending on your location and expertise. For instance, larger private corporations typically pay significantly more than public firms.
Here’s a breakdown of how lawyers are paid in the most popular sectors of this profession:
As you’ve likely heard, there is a debate over whether or not the country is in recession. While the verdict is still not clear, there are indications that we are heading towards a recession if we aren’t already in one.
While this economic decline will create significant financial pressure on the nation, it also means bankruptcy lawyers will increase in demand. These lawyers are already consistently in demand, but we can expect a major rise in employment over the next few years.
In this guide, we’ve focused on answering how to become a bankruptcy lawyer, as well as follow-up questions such as: “how long does it take to become a bankruptcy lawyer?,” “what do bankruptcy lawyers do?,” and “how much do they make?”
While the answers to these questions should give you a solid understanding of this legal specialty, you may have some unanswered questions. In hopes of addressing these inquiries, here are the answers to the most frequently asked questions about bankruptcy law.
It will take seven to eight years to join this legal profession, depending on your desired level of education. It will take four years to complete an undergrad, three years to complete a JD degree, and an additional year to complete an LLM if you want more advanced training.
Bankruptcy law is difficult because there are several factors to consider when representing clients. You have big shoes to fill because your decisions and judgements will directly impact your clients’ lives and futures!
You must be able to help your clients choose the best path to becoming debt-free as soon as possible. This becomes difficult with larger corporations and many bankruptcy cases take years to complete!
The precise salary you can expect to make as a bankruptcy lawyer will depend on your level of experience and location. However, the average salary of a bankruptcy lawyer is over $140,000 a year.
Yes, bankruptcy lawyers are always in demand, and this demand is only expected to increase in the near future because of the recession.
When picking the best school to pursue a JD, you should find a school that offers bankruptcy law clinics, so you can begin gaining valuable experience working with real clients. This experience can help you land internships at bankruptcy firms during your JD, which will ultimately make you a more competitive candidate post-graduation!
With the possibility of losing your assets and having to put a halt on all of your future plans, dealing with an overwhelming amount of debt can be terrifying! Bankruptcy lawyers can ease some of these fears and help clients get out of these tough situations with as little loss as possible.
If you’d like to make this significant impact in people’s lives, follow the steps listed in this guide to join this profession. But ensure you’re in it for the long haul! As rewarding as this career will ultimately be, it’ll be a lengthy journey before you make it to your final destination!