What Is the Return From Hiring a Bankruptcy Attorney for Chapter 7 Asset Case Filings?
DOI:
https://doi.org/10.33423/jabe.v27i2.7551Keywords:
business, economics, consumer bankruptcy, asset exemptions, attorney, Chapter 7, expected returnAbstract
This manuscript assesses the returns to hiring an attorney to represent an individual who holds exempt-eligible assets when filing for Chapter 7 bankruptcy. A panel of closed Chapter 7 asset case filings was collected over the years 2016-2021 from the Public Access to Court Electronic Records (PACER) system in the Eastern District of Washington State. The study results indicate that filers with an attorney of record, and who report attorney payments to the Court, can shield 83.3 percent of assets through the exemption process, compared to the overall sample mean of 68 percent. This implies a return of approximately 22.5 percent. Therefore, hiring an attorney and reporting attorney payments in a filing leads to a higher expected return. We also find statistically significant evidence suggesting that filer specific factors, such as county of residence and year of filing, influence the expected return from hiring an attorney.
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