Bankruptcy is filed when an individual is unable to repay their accumulated debts. It is handled in federal courts and allows the debtor to be relieved from their overwhelming amount of debts and creditors the chance to receive repayment partially or wholly.
It is a legally complicated procedure that can be difficult to navigate without the guidance of a debt relief lawyer.
What does your lawyer do?
Ensure that it is the right choice for you
While filing for bankruptcy has its benefits, there may also be serious consequences that impact your future. Consulting a lawyer ensures that bankruptcy is the most beneficial path for you among other alternatives and how to proceed with filing it.
Determining which type of bankruptcy you should file
There are different types of bankruptcies, with their own eligibility, procedures, and consequences. A skilled lawyer can assess your financial situation and determine which type is the best for you. The most common bankruptcies are Chapter 7 and Chapter 13.
Chapter 7:
In this type, the debtor’s assets are liquidated by a court-appointed trustee to pay off the creditors. Certain debts such as credit card debt and medical bills are also discharged after the proceeds are exhausted.
Chapter 13:
Debtors repay their debts over usually 3-5 years with a proper plan, which allows them to retain property such as their house and vehicles. However, the debtor must prove that they have a steady flow of income as part of the eligibility criteria.
Advice
Based on the type of bankruptcy filed, a lawyer can offer you effective advice after carefully reviewing your assets and debts. They help you understand the federal laws regarding your case and protect your rights. Understanding the process can help make it simpler for you and relieve your stress.
Help you prepare
After qualifying for a type of bankruptcy, you have to value your property accurately, which can be confusing. Your lawyer helps you estimate the most realistic valuation of your assets, apply the exemptions laws in your state to protect the maximum of your assets, and calculate which debts of yours can and cannot be erased. They also negotiate with creditors for reduced payment and interest rates and take action if they violate the automatic stay.
The presence of a lawyer can significantly benefit your case and improve your chances of having a smooth bankruptcy procedure. Their support and expertise enable you to have a fresh financial start and become financially independent by making better decisions.