Are you familiar with when to hire a bankruptcy lawyer? Learn about when to contact a professional attorney to protect your financial situation.
Financial difficulties can be overwhelming, and when debt becomes unmanageable, individuals and businesses may consider bankruptcy as a way to obtain a fresh financial start.
If you are considering this, you are not alone. There were 387,721 bankruptcy filings in 2022.
While bankruptcy can offer relief and protection from creditors, navigating the complex legal process can be challenging without the expertise of a bankruptcy lawyer.
In this comprehensive article, we will provide an overview of when it’s advisable to hire a bankruptcy lawyer.
When to Consider Hiring a Bankruptcy Lawyer
Not everyone who’s going through bankruptcy might choose to hire an attorney to help them navigate this process. But some folks should absolutely not forgo this option. Who are they?
The following points will give you a clue if you fall into that category.
Complex Financial Situation
If your financial situation is straightforward, you might consider filing for bankruptcy without an attorney. But if you answer yes to the following questions, then an experienced bankruptcy attorney can provide invaluable guidance.
- Are your financial affairs intricate?
- Do they involve multiple creditors, significant assets, or complex legal issues?
Uncertainty About Eligibility
Determining which type of bankruptcy is suitable for your circumstances can be challenging. An attorney can assess your eligibility for Chapter 7 or Chapter 13 bankruptcy, taking into account your income, assets, and debt.
Bankruptcy laws are intricate and constantly evolving. A bankruptcy attorney specializes in this field. They stay updated on the latest legal developments and ensure that your case adheres to all regulations.
Protection from Creditors
Once you file for bankruptcy, an automatic stay is issued. This halts creditors’ collection efforts, such as:
- Wage garnishments
- Foreclosure proceedings
- Harassing phone calls
An attorney can protect your rights and ensure that creditors comply with the stay.
Maximizing Asset Exemptions
An attorney can help you understand and utilize exemptions that protect your assets during bankruptcy. This is especially crucial if you have valuable property or assets you wish to retain.
Avoiding Common Pitfalls
Filing for bankruptcy involves strict procedural rules, documentation, and deadlines. Failure to follow these guidelines can result in your case being dismissed or denied. A bankruptcy lawyer helps you avoid these pitfalls and ensures your case progresses smoothly.
Negotiating with Creditors
In some cases, a bankruptcy attorney can negotiate with creditors to settle debts before filing for bankruptcy. This could potentially reduce the overall amount you owe.
Types of Bankruptcy
Most people don’t know that there are many different ways to declare bankruptcy depending on your circumstances. This section should give you a bit more guidance on what they are.
If you hire bankruptcy lawyers, you won’t have to worry about all of this. They will be able to discern what the best course of action for you or your business is.
Chapter 7 Bankruptcy
Also known as liquidation bankruptcy, Chapter 7 involves the sale of non-exempt assets to repay creditors. Remaining unsecured debts are typically discharged, providing debtors with a fresh financial start. Chapter 7 is typically suitable for those with limited income and substantial unsecured debts.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy involves creating a three-to-five-year repayment plan to catch up on past-due debts while keeping valuable assets like homes or cars. It’s ideal for individuals with regular income who can manage a repayment plan.
Chapter 11 Bankruptcy
Primarily used by businesses, Chapter 11 allows for debt reorganization and business restructuring. It enables businesses to continue operations while repaying creditors under a court-approved plan.
Roles and Responsibilities of a Bankruptcy Lawyer
You might wonder if there is any point in hiring a bankruptcy attorney when you could do all the paperwork yourself by doing some online studying. We wish to dissuade you from going down the DIY path.
A bankruptcy lawyer plays several crucial roles throughout the bankruptcy process.
The attorney assesses your eligibility for different bankruptcy chapters. They then advise on the most suitable option based on your financial circumstances.
Bankruptcy involves extensive documentation and paperwork. Your attorney will ensure that all necessary forms are accurately completed and filed on time.
If you have assets you wish to protect, your attorney can help you take advantage of available exemptions to minimize asset loss.
The attorney will communicate with creditors on your behalf, addressing collection efforts, cease-and-desist letters, and creditor disputes.
Your attorney represents you in court proceedings, including the 341 Meeting of Creditors and any hearings or disputes that may arise.
Bankruptcy attorneys must provide mandatory credit counseling and debtor education programs to clients, helping them understand the financial management skills necessary to avoid future financial difficulties.
Choosing the Right Bankruptcy Attorney
Selecting the right bankruptcy attorney is a critical decision in your bankruptcy journey.
Not only should they have extensive experience in bankruptcy law, but they should also specialize in bankruptcy. Also, make sure your bankruptcy attorney is licensed to practice in your jurisdiction and is a member of relevant bar associations.
Read client reviews and testimonials to gauge the attorney’s reputation and client satisfaction. Discuss fees and payment arrangements upfront to ensure transparency regarding the cost of legal services.
Since you are already in financial straits, you don’t want to hire a bankruptcy lawyer to get you into further money troubles.
Make sure that the bankruptcy lawyer has the time and wherewithal to focus on your case. You don’t want to hire someone who never replies to your messages or answers your calls. This could leave you anxious and worried about your case with no answers to be found.
Bankruptcy Law Is Complicated and Shouldn’t Be Tampered With
If you are buying a house, then you could potentially do it all on your own. But bankruptcy law isn’t something you want to go it alone, especially if your financial situation is fraught with complications.
Still searching for a suitable bankruptcy attorney? Johnson-Turner Legal is here to help you with your bankruptcy filings and any related issues.
Don’t hesitate. Set up an appointment with us today and start untangling this web of complications that your finances have ended up in. We do flat fee costs for our services, rather than hourly rates!