The word bankruptcy brings a negative connotation of failure in pop culture. In reality, bankruptcy is a formal legal action that many companies elect to use as a financial strategy. Bankruptcy is a judicial action that a person or corporation enters to discharge existing debts or obligations when the entity has no means to pay those debts.
Filing for bankruptcy can be a financial lifeline for a person or business. However, given the sensitive nature of dealing with debtors, bankruptcy proceedings can get testy and require an arduous amount of legal filings. Hiring a bankruptcy lawyer is important to assist you in this process. A qualified bankruptcy lawyer will assist in taking a proceeding from start to finish.
What is a Bankruptcy Lawyer?
A bankruptcy lawyer specializes in providing legal advice to clients regarding bankruptcy. Bankruptcy is governed by its own set of laws and even has its own court. Bankruptcy laws are rather complex and choosing a specialist who can navigate the bankruptcy code can be one of the most important decisions you make in your case.
What do Bankruptcy Lawyers Do?
Bankruptcy is a serious decision as it can be on your credit record for seven or ten years. Talking to a bankruptcy lawyer can help you decide if bankruptcy is right for you, what form of bankruptcy best suits your situation, and how to properly file.
Why hire a Bankruptcy Lawyer?
There are many reasons why hiring a Bankruptcy Lawyer is in your best interest:
- Bankruptcy proceedings can be intense and complex, especially if you are required to show up in court. A lawyer will assist in navigating through the formality of proceedings, which can help you feel at ease, especially if you haven’t been in a courtroom before.
- Bankruptcy lawyers will assist to navigate the different options you will face. Most people petition for bankruptcy under Chapter 7 or Chapter 13 of the Bankruptcy Code. Chapter 7 is a liquidation or "straight" bankruptcy, whereas Chapter 13 is a court-supervised repayment plan. Chapter 7 bankruptcy is intended for those who are unable to repay their unsecured obligations. As a result, in order to achieve a Chapter 7 bankruptcy discharge, you must fulfill certain income standards. If you apply for Chapter 13, you must have enough income to finance the repayment plan. A bankruptcy lawyer can assess your financial status, explain your bankruptcy choices, and advise you on which bankruptcy option is the best decision for you.
Perhaps one of the most important services a bankruptcy lawyer can provide is to navigate the various forms required to file. Bankruptcy lawyers will know which forms you will require and how to appropriately fill them out. Some forms include:
- Petition for Bankruptcy
- A and B schedules (detailed list of assets)
- C Schedule (bankruptcy exemptions)
- Schedules D-F (creditor information)
- G Schedule (contracts and leases)
- Schedule (list of co-debtors)
- Schedule (detailed income information)
- J Schedule (detailed list of household expenses)
- Schedules Declaration (sworn statement verifying the information contained in the schedules)
- Financial Affairs Statement (roughly two dozen detailed questions about your financial history).
- The Means Test (income test and calculation of disposable income)
- Social Security Number Verification
- Intentions Statement (Chapter 7 – a statement about how you intend to treat secured debts)
Finding and Choosing a Bankruptcy Lawyer
Here are some methods for locating a reliable bankruptcy attorney:
- Request recommendations from trustworthy family members, friends, or coworkers.
- Visit the National Association of Consumer Bankruptcy Attorneys' website.
- Contact your state or local bar association.
- Inquire with a legal reference service.
Talk to at least two lawyers before deciding on the one who will take on your case. You should also enquire about their experience with bankruptcy cases and the prices they charge.
Fees for a Bankruptcy Lawyer
One of the biggest worries that most individuals have is whether they can afford to hire a bankruptcy attorney. The bankruptcy attorney's fee, for example, might exceed $1000, and some bankruptcy attorneys request the whole amount upfront without proposing a payment plan. However, many bankruptcy attorneys do offer payment plans and are willing to work with you to figure out a payment option that you can afford.
In bankruptcy proceedings, attorneys' fees are uncommon in that they must be reported to and approved by the court. The bankruptcy court may set the fees that attorneys can charge in bankruptcy proceedings.
The attorneys are allowed to charge an amount given their skill and the intricacy of your case. The amount they charge will be reviewed by the court. Some courts impose a "presumptive" maximum charge for specific sorts of bankruptcy cases and require the attorney to prove a compelling reason for charging more.
Find a Bankruptcy Lawyer Today
A bankruptcy lawyer can assist in making bankruptcy proceedings easier. Navigating a bankruptcy case without a lawyer can be a time-consuming process and can be prone to mistakes. Do your research, consider your options, and find a bankruptcy lawyer that you have confidence will assist you in meeting your financial goals.