Financial hardship can happen to anyone, whether due to job loss, medical bills, or unforeseen circumstances. When debt becomes overwhelming and it seems like there’s no way out, bankruptcy may be an option to consider. However, navigating the bankruptcy process can be complex and overwhelming without the guidance of an experienced attorney.
In this article, we’ll discuss why you need a bankruptcy attorney during financial hardship, the benefits of hiring one, and how to choose the right attorney for your unique situation.
What is Bankruptcy?
Bankruptcy is a legal process that allows individuals or businesses to eliminate or restructure their debts under the protection of the bankruptcy court. There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13.
Chapter 7 bankruptcy involves the liquidation of non-exempt assets to pay off creditors, and any remaining debt is discharged. Chapter 13 bankruptcy involves creating a repayment plan to pay off creditors over a period of three to five years.
When to Consider Bankruptcy
Bankruptcy should be considered as a last resort when all other options, such as debt consolidation or negotiation, have failed. Some signs that it may be time to consider bankruptcy include:
- Overwhelming debt that cannot be paid off in a reasonable amount of time
- Creditor harassment, including constant calls and letters
- Threats of legal action, such as wage garnishment or repossession
- Foreclosure or eviction
- Medical bills that cannot be paid off
- Unemployment or reduced income
- Divorce or other major life changes
The Role of a Bankruptcy Attorney
A bankruptcy attorney is a legal professional who specializes in bankruptcy law and can guide clients through the bankruptcy process. The attorney’s role is to protect the client’s interests, including ensuring that all debts are accurately listed, that the client’s assets are protected, and that the client receives the maximum benefit possible under the bankruptcy code.
A bankruptcy attorney can also provide valuable advice on whether bankruptcy is the right choice for a client’s specific situation, as well as which type of bankruptcy is most appropriate. In addition, the attorney can provide guidance on how to prepare for bankruptcy, including which debts to pay off and which to hold off on, and how to avoid actions that could be seen as fraudulent.
Benefits of Hiring a Bankruptcy Attorney
There are many benefits to hiring a bankruptcy attorney, including:
Protection from Creditor Harassment: Once a bankruptcy case is filed, creditors are legally required to stop all collection activities, including phone calls and letters. This can provide relief from the constant stress of creditor harassment and allow the client to focus on rebuilding their financial future.
Accurate and Complete Filing: Filing for bankruptcy requires a significant amount of paperwork and documentation. An experienced bankruptcy attorney can ensure that all required documents are completed accurately and completely, reducing the risk of errors or omissions that could delay the bankruptcy process or lead to the case being dismissed.
Asset Protection: A bankruptcy attorney can help protect the client’s assets by ensuring that exemptions are properly claimed and that any non-exempt assets are handled appropriately. This can help the client retain important assets, such as their home or car.
Maximizing Benefits: An experienced bankruptcy attorney can help the client receive the maximum benefit possible under the bankruptcy code, including the discharge of all eligible debts and the creation of a repayment plan that is manageable for