A bankruptcy attorney will serve as your advocate and guide through what is a sometimes confusing process. Therefore, taking time to contact a few lawyers and knowing what to look for can set you on the path toward successfully filing for bankruptcy.
This guide thoroughly explains who a bankruptcy attorney is, their responsibilities, and other things that distinguish one from another.
Table of contents
Who Is A Bankruptcy Attorney?
A bankruptcy lawyer specializes in providing legal advice to clients regarding bankruptcy, as well as preparing legal documents and representing clients in court. A lawyer must have a law degree and be licensed in the state in which they practice.
Types Of Bankruptcy Attorney
There are two different types of bankruptcy attorneys: commercial bankruptcy attorneys, and consumer bankruptcy attorneys.
1. Commercial bankruptcy attorney
Commercial bankruptcy attorneys assist you to file for bankruptcy for your business. It is their duty to defend your business from creditors. They can also assist you in repaying debts and requesting time to restructure your company. furthermore, they usually specialize in Chapter 7 and Chapter 11 bankruptcy.
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2. Consumer bankruptcy attorney
They help you file for bankruptcy for yourself or with your spouse. When you and your partner file for bankruptcy, consumer bankruptcy lawyers defend you and your partner by dealing with creditors, clearing debt, and setting up payment arrangements. They usually specialize in Chapter 7 and Chapter 13 bankruptcy.
What Are The Duties Of A Bankruptcy Attorney?
A bankruptcy lawyer’s goal, whether representing a debtor or a creditor, is to guide the client’s case through the court system and secure the best possible outcome under challenging circumstances. Due to the fast-paced nature of bankruptcy cases, bankruptcy lawyers appear to be constantly on their toes.
Here are a few of the things they do in relation to the litigation they’re constantly dealing with:
1. A bankruptcy attorney opens the safety valve
Bankruptcy laws function as a safety valve for the economy. Both consumers and large enterprises benefit from the bankruptcy safety valve. When the final order is entered and the case is closed, money is injected into the economy, which stimulates growth.
2. Settles the matter amicably in court
A morning in bankruptcy court may seem regular to an experienced bankruptcy lawyer, but a wide range of legal difficulties might surface at any time, necessitating a comprehensive legal knowledge base.
3. Provide documents for litigation
The lawyer should provide you with a complete list of documents needed for your bankruptcy case.
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4. Render legal counsel
A bankruptcy lawyer can advise you on the bankruptcy process and whether it is the best option for you. They are designed to assist you in taking a critical look at your debts and assets to assess whether bankruptcy is the best option for you or if a better approach is to try to improve your situation from a different angle.
For example, the majority of your debts may be unsuitable for bankruptcy protection, such as school loans, and an attorney can assist you in determining whether bankruptcy is genuinely beneficial.
5. Help you make the right decision
After you’ve decided on your unique filing strategy, an attorney can assist you in making critical decisions ahead of time. If you apply for chapter 7, for example, an attorney can advise you on your best options for maintaining any assets you don’t want to lose in order to repay creditors. If you file for chapter 13, your attorney can work with you to come up with a payment plan that you can afford.
Attorneys can also assist you in deciding whether to file jointly with a spouse or individually, as well as the impact on your co-signers on any loans that will be affected by your bankruptcy petition. An attorney must have a good understanding of federal bankruptcy rules in order to be a reliable guide for this area of your decision-making.
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How To Know You Need A Bankruptcy Lawyer?
Consumers can opt to hire an attorney or represent themselves in bankruptcy, but as the statistics from the American Bankruptcy Institute shows, choosing an attorney has a significant advantage.
Here’s a claim by debt.org, highlighting the importance of a bankruptcy lawyer:
- Only one in 25 consumers using an attorney is denied a discharge when filing Chapter 7. One out of three who files on their own, do not receive a discharge.
- Only about one in 50 consumers filing for themselves in Chapter 13, receives a discharge. Hire a lawyer and your chance for success is better than four-out-of-10.
Depending on the form of bankruptcy, bankruptcy might stay on your credit report for seven or ten years. As a result, you might think about engaging a bankruptcy lawyer.
Here are a few reasons why you need the services of a bankrupt attorney:
1. You will be uncomfortable dealing with your bankruptcy case
If you don’t have much expertise in drafting legal paperwork or making persuasive arguments, you could lose your case due to incredibly basic mistakes.
An experienced attorney is aware of the documents that must be filed and the dates that must be met. An experienced attorney is familiar with the courts involved and the arguments that must be made to obtain the desired outcome.
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2. Completing the paperwork is tedious
Filling out the paperwork incorrectly can lead to disaster. It’s completely possible that a paperwork blunder will allow the Chapter 7 trustee to sell your home! If you employ the services of a bankruptcy lawyer, these situations aren’t bound to happen.
3. Better handles the debt collectors
If debt collectors are constantly disturbing you, a bankruptcy attorney can handle them amicably. Once you tell a debt collector that a lawyer represents you, the collector automatically switches communication to the lawyer.
How Much Do Bankruptcy Attorneys Charge?
Lawyer fees for bankruptcy vary depending on the type of bankruptcy you choose, the complexity of your case, and your location.
A Chapter 7 bankruptcy costs $1,500, whereas a Chapter 13 bankruptcy costs $3,500. A filing charge of $338 for Chapter 7 and $313 for Chapter 13 is also included, as are payments for credit counseling and financial management courses, which range from $10 to $100.
How To Find A Bankruptcy Lawyer
If you decide to hire a bankruptcy lawyer to handle your case, you’ll always want to pick one who’s distinguished and qualified. Here are some ways to find a trustworthy bankruptcy lawyer:
- Ask trusted relatives, friends or coworkers for recommendations.
- Search the website of the National Association of Consumer Bankruptcy Attorneys.
- Check with your state or local bar association.
- Contact a lawyer referral service.
Forbes advises that you talk with at least two lawyers before settling on the one who’ll take on your case. Among other things, you should inquire about their experience with bankruptcy cases and the fees they charge.
Is Bankruptcy Right For You?
Filing for bankruptcy is never an easy decision. However, before taking the decision to file for bankruptcy, you’ll have to weigh the pros and cons of the long-term effects on your debt and credit. But in general, bankruptcy may be the best option if:
- You see no way to pay off your debts within five years.
- Your amount of debt (excluding a mortgage) is greater than 40% of your income.
- You’re paying as much as you can toward your debts but not making progress.
- Debt payments are preventing you from meeting other financial goals, such as saving for retirement.
FAQs On Bankruptcy Attorney
A Chapter 7 bankruptcy costs $1,500, whereas a Chapter 13 bankruptcy costs $3,500. A filing charge of $338 for Chapter 7 and $313 for Chapter 13 is also included, as are payments for credit counseling and financial management courses, which range from $10 to $100.
A bankruptcy lawyer’s goal, whether representing a debtor or a creditor, is to guide the client’s case through the court system and secure the best possible outcome under challenging circumstances.
A bankruptcy lawyer specializes in providing legal advice to clients regarding bankruptcy, as well as preparing legal documents and representing clients in court.
Individuals aren’t required to have a lawyer to file for bankruptcy (corporations and partnerships do). Given the complicated procedures surrounding bankruptcy filings, you’re probably better off with a bankruptcy lawyer who can protect your rights as a debtor.
Conclusion
Filling for bankruptcy can be challenging and confusing at the same time. With a good attorney rest assured of clarity and comfort that will help you regain your financial footing.
References
- forbes.com – Bankruptcy Lawyer: Do You Need One And What To Expect
- nerdwallet.com – How to Find a Bankruptcy Attorney
- nolo.com – What Should I Expect From My Bankruptcy Lawyer
- hg.org – What is the Role of a Bankruptcy Attorney?
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