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What Does a Bankruptcy Lawyer Do?

What Does a Bankruptcy Lawyer Do?

Benefits of a Bankruptcy Lawyer

A bankruptcy filing may be routine for an experienced bankruptcy lawyer, but for a debtor or business owner, it is a major event that affects your credit and property.

If you are considering saving yourself the legal fees and doing the filing yourself, consider whether you would undertake other major activities or decisions that are out of your realm of knowledge or skill. Most people would not diagnose or treat themselves for an illness or for tooth care, nor would they build their own house or remodel a house on their own.

Bankruptcy consists of different chapters under which to file. The most common is a consumer bankruptcy, or a Chapter 7, which can discharge much of your debt, but you do have to meet eligibility requirements. Also, not all debt is dischargeable and if you file and discover that you cannot discharge past due taxes, student loans, or other debts, you could find yourself in worse shape than before you filed.

If you have real estate holdings along with your home, these are not exempt and are subject to sale by the trustee. Getting the right advice from your bankruptcy attorney regarding this issue could help you save your property.

The Attorney’s Responsibilities

Your attorney should examine your financial situation and determine if bankruptcy will help your resolve your main problem. For instance, if you are facing foreclosure, a Chapter 7 will not stop it, although it will stay the process for a short time until the bank or lender files a motion to lift the automatic stay that goes into effect whenever a bankruptcy is filed. Your attorney could suggest a Chapter 13 in this situation if you can meet the payments, or another alternative to help you with your home.

Your attorney will advise you what documents are needed for filing and will determine your eligibility. Each state has property exemptions; some offer an alternative between federal and state exemptions–your attorney will help you to choose which one will benefit you more. Your attorney can also help you save your property by converting certain nonexempt assets into exempt ones without defrauding any creditors.

Complications in the Petition

Most Chapter 7 petitions are simple and routine, unlike a Chapter 13 or an 11. A Chapter 13 is for small business owners or debtors who do not qualify for a Chapter 7 or who may be behind on their mortgages but are able to make current payments while paying off the arranges for up to 60-months.

Businesses that wish to stay in business file for Chapter 13 or a Chapter 11, if a corporation, and a payment plan must be carefully drafted that meets the approval of the trustee and creditors.

Complications can arise if the trustee or a creditor objects to the status of a piece of property or debt, or claims that there was an illegal transfer of property. If assets are hidden, this could create serious problems including criminal fraud. If this occurs, your attorney will have to negotiate or litigate the matter in bankruptcy court.

Dealing with Creditors

You may have to deal with or negotiate with creditors. Your attorney is best suited to this task and has the experience to know how to resolve differences to your satisfaction. You will also have to attend a Creditors Meeting shortly after filing. Although these are typically routine and very short, there is the risk that if a problem is raised by the trustee or creditor, that you will not know how to resolve it. Your attorney will know how to answer the questions posed to you and will so advise you. Legal matters will be addressed by your attorney.

Paying your bankruptcy lawyer to handle the paperwork, filing, and with any issues that arise is well worth the cost of discharging thousands of dollars in debt and getting you a new start with your life.

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