If you struggle to pay bills, you're not alone. Many people experience financial setbacks throughout their lives. Luckily, there are many strategies you can use when debt becomes un-affordable due to illness, job loss, divorce, or overspending.
Congress has provided bankruptcy as a way for citizens to have some of their debts forgiven, if they meet certain criteria. Although individuals aren't required to have an attorney for bankruptcy cases, hiring an attorney is recommended, because bankruptcy law is complex. Declaring bankruptcy significantly impacts your financial situation and life, so it’s best to speak with an experienced attorney who can offer guidance through the process. If you're considering declaring bankruptcy, here are some ways a bankruptcy lawyer can help.
Determine If You Will Benefit From Filing Bankruptcy
Bankruptcy is a legal action that can erase certain debts. However, not every person with debt may need to file bankruptcy, or qualifies for bankruptcy. Some people with very low unearned income, such as Social Security, may already have protected money or property that creditors cannot legally reach.
A bankruptcy lawyer will help you determine if your assets are already protected or if bankruptcy is the best choice for you. For example, an attorney may recommend filing bankruptcy under the following common circumstances:
- When a person’s debt exceeds their income.
- When creditors, due to lawsuits, are garnishing a person’s wages or levying against assets
- When a person's utility service has been shut off.
- When a person's home may be at risk of foreclosure.
If your attorney recommends that you file for bankruptcy, he or she can provide guidance as to what type of bankruptcy to file, either Chapter 7 or Chapter 13. An attorney can also help you understand the impact filing bankruptcy can have on your life, such as loss of assets, impact on credit, etc.
Provide Legal Guidance
The bankruptcy process can be complicated. When you hire an attorney, you have a legal professional available to answer your questions and provide you with personalized legal advice. For instance, an attorney will help a client understand what types of debt can be discharged in bankruptcy.
A court will often discharge unsecured debts after he or she files bankruptcy. Unsecured debt includes utility bills, some personal loans, medical bills, and credit cards. However, debts like alimony, most taxes, and student loans cannot be discharged in bankruptcy. An attorney can also help you keep property secured by loans, such as cars and houses. Talk with a bankruptcy lawyer to help you figure out what secured and unsecured debts you have.
Assist with Paperwork
There is a great deal of paperwork involved in the process of filing bankruptcy that must be completed properly. Many people find it beneficial to have an experienced attorney help them complete the necessary documents. Fortunately, many attorneys who regularly handle bankruptcy cases have specialized software that makes preparing and filing bankruptcy documents much easier. An attorney can also ensure your paperwork is filed accurately, to help you avoid issues down the road.
Represent You at Your Bankruptcy Hearing
Once you complete the paperwork and the case is filed, the court schedules a §341 Hearing, or Meeting of Creditors.
This meeting is an opportunity for creditors and the Bankruptcy Trustee, who is appointed by the Court to oversee your case, to question debtors under oath concerning their bankruptcy claim. The debtor should bring an attorney to represent him or her at this hearing. The attorney will provide information to the Trustee and creditors regarding paperwork and your bankruptcy claim.
After the Meeting of Creditors, an attorney will keep a client updated on whether the court issues a Discharge Order. The attorney will also ensure his or her client meets all obligations required by the Court and Trustee. Attorneys will make sure clients have all the necessary information throughout the entire process. When an individual files bankruptcy at the right time and in the proper fashion, he or she can often get a fresh start for his or her financial future.
When you have an experienced attorney for your bankruptcy case, you will feel confident knowing a professional is there to assist you through the process. If you're considering filing bankruptcy, call an attorney to help you decide if bankruptcy is right for you.