Thinking about filing for bankruptcy? While the law allows debtors to file their petitions themselves, that’s usually a mistake. Before choosing this path, read on to find out why most people are better off hiring a bankruptcy lawyer.
Help With Deciding on the Best Course of Action
Debtors have multiple options available for getting their finances back on track. Even if bankruptcy is clearly the best option, it’s still wise to consult a lawyer. There are multiple types of personal bankruptcy, and a lawyer can help debtors determine which of them provides the best fit for their unique situations.
Eliminate All Eligible Debts
Bankruptcy lawyers know what types of debts can be discharged and which will not be impacted by a successful claim. They can help clients identify and eliminate any debts that have reached their statutes of limitations for collections, for example, and ensure that clients can fully discharge their obligations to the extent possible under current laws. Working with a lawyer helps to reduce problems with lingering debts after completing a bankruptcy filing.
Protection From Harassment
When a debtor files for bankruptcy, it initiates an automatic stay on collections. It takes time to collect paperwork, assign a trustee, schedule a meeting of creditors, and get a bankruptcy petition approved, though. Hiring a lawyer early on will put a stop to those harassing phone calls much sooner.
Avoid Unnecessary Delays
Filing for bankruptcy can be a complicated procedure. It requires filling out a lot of paperwork, and if that paperwork isn’t accurate, sufficiently detailed, and filed in a timely manner, it can create unnecessary delays. Bankruptcy attorneys can provide legal advice regarding asset valuation, income, expenses, and disclosures and help to ensure that clients have filled out the paperwork correctly to keep the whole process moving forward quickly.
Detailed Understanding of the Law
Most debtors don’t have a nuanced understanding of the U.S. Bankruptcy Code, nor are they familiar with local laws. Bankruptcy attorneys know all the ins and outs of every local and federal law, including what types of property are exempt and who is eligible for each type of bankruptcy. They’re also familiar with the filing process and timeframes and appropriate courtroom procedures.
Protection From Uncertainty
Being in debt is already stressful enough. Those who choose to file for bankruptcy in an attempt to reduce their debt burdens don’t need the extra anxieties of worrying about potential mistakes, preparing for court appearances, and ensuring that every step of the process is completed on time. They can rely on lawyers to complete the paperwork correctly, keep them informed, and provide representation during meetings of creditors and courtroom appearances.
Even innocent mistakes can wind up landing debtors in jail, and hiring a lawyer is the best way to avoid this unfortunate situation. To give just one example, most people don’t know that they are required to report property they have not received yet but will receive within 180 days. Even if the filer did not intend to hide assets or income from the court, he or she can still wind-up facing criminal charges.
The Bottom Line
It may feel counterintuitive to choose to pay lawyer’s fees when bankruptcy filers are already drowning in debt. In most cases, though, it’s well worth the money.