For most people, a bankruptcy lawyer is an indispensable part of filing for bankruptcy, going through bankruptcy proceedings and recovering after discharge is complete. A bankruptcy attorney has several functions throughout the process and can help a client determine the best courses of action. Bankruptcy is a very complex legal procedure, and bankruptcy courts are not tolerant of mistakes. Even slight mistakes may cause a judge to dismiss the case or cause the person filing to lose important assets, such as a home or car. Experienced attorneys make sure that no mistakes are made and clients’ assets are protected to the full extent of the law.
Bankruptcy Attorneys Help You Understand What Bankruptcy Is
One of the most important functions of a bankruptcy attorney is explaining bankruptcy to clients. Before speaking to an attorney, most people have only a vague understanding of bankruptcy law. They know that it can help them erase debt, but they are not fully aware of the consequences and available options. Bankruptcy may not be the right decision in every situation. For some individuals, debt settlement may be more beneficial, and most bankruptcy lawyers can start such a program.
Help with What Bankruptcy You Should File
Not everyone is aware that individuals have a choice of two different types of bankruptcy: chapter 7 and chapter 13. Both types have different sets of benefits, but one is almost always a better choice over the other when considering an individual’s specific situation.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is sometimes referred to as straight bankruptcy, but it is also known as liquidation bankruptcy. In chapter 7, the debtor agrees that his or her assets will be sold, and the proceeds will be split amongst the creditors. Certain personal assets are protected, such as a level of equity in a home, a personal vehicle and personal effects. Even if the value of the assets falls short of the money owed, the total debt is discharged. Chapter 7 bankruptcy usually only takes a few months, and it eliminates nearly all forms of unsecured debt.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is also known as debt adjustment bankruptcy. It is actually a form of debt consolidation mandated through the court. In chapter 13 bankruptcy, debts are consolidated and adjusted so that the debtor makes a single monthly payment for three to five years. At the end of the term, the debts are fully settled. This type of bankruptcy is very advantageous for those who have a steady income and assets they would like to protect.
Explaining the Bankruptcy Process
Bankruptcy lawyers handle every phase of the bankruptcy process. In chapter 7 bankruptcy, the process begins with an approved class for credit counseling. An attorney will set up an appointment for this to be done. Once it is completed, it is time to prepare the petition and supporting documents. In some cases, the petition can be up to 60 pages in length. After the petition is filed, creditors are barred from contacting a debtor. If a creditor does contact the debtor, an attorney can usually prevent that specific creditor from doing so again.
The next step in the process is the meeting of creditors with the trustee. The trustee is in charge of handling the details of the bankruptcy case. It is the trustee that usually makes the decisions in a bankruptcy case because the judge rarely goes against the trustee’s recommendations. If any creditors object to the debt discharge, an attorney can defend a debtor’s position. After the meeting of creditors is settled, the debtor must take a financial management course before the discharge is complete.
Help with Moving Forward after Bankruptcy
A bankruptcy attorney can be valuable even after the case is finished and debts have been discharged. Attorneys can provide advice and recommendations about how to rebuild credit or otherwise proceed with life after bankruptcy.
Important Disclaimer: The information discussed above and throughout this website should not be relied upon to make any decisions without first speaking to a bankruptcy attorney. There are many intricate rules of law governing bankruptcy with many exceptions to the general rules that could change the advice given by an attorney based on the differing facts in each person’s special set of circumstances. THEREFORE, it is important to discuss any information contained in this website with one of our attorneys before taking any action or refraining from taking any action.