Many folks have asked me why an attorney will make a difference when filing for bankruptcy. Honestly, it might not make a difference depending on your circumstance. I've seen lots of bankruptcy filed without attorneys and they turn out just fine. On the other hand, I've seen some poorly planned bankruptcy turn very ugly for the debtors--costing the debtors everything they own and more.
Based on my experience, a simple Chapter 7 bankruptcy can run between $900 to $1,500 for attorney's fee. While that may seem a lot to folks who are scrapping the bottom, I always counsel folks against doing it themselves. The reason is because you cannot "unfile" a bankruptcy; there is no right to dismiss a Chapter 7 petition.
What happens when a creditor challenges your bankruptcy? There is a process called an "Adversary Proceeding" that is filed in a bankruptcy to challenge a debtor's right to a discharge of debts. In a nutshell, it is a lawsuit filed in bankruptcy court. These adversary proceedings are brought by disgruntled creditors who will stop at nothing to make the debtor "pay". Litigating an adversary proceeding can be costly. In some case, a well-planned bankruptcy can reduce the risk of an adversary proceeding. Win or lose, it is not unheard of to see a $20,000 to $30,000 legal bill to defend a poorly filed bankruptcy. I, personally, have actually billed this much to represent a debtor in an adversary proceeding. Most folks who are served with an adversary proceeding cannot afford to defend themselves and fall victim to frivolous challenges by disgruntled creditors.
When considering whether to go with an attorney or not, consider how much you can potentially save by going with a good attorney.