Do You Need a Lawyer to File Bankruptcy?
Consumers are so frightened of the word bankruptcy that they forget its true purpose. It protects creditors and provides relief from certain, or all, debt obligations. Hiring a lawyer to file for bankruptcy can help you protect your assets and free yourself from financial responsibility.
Although it is possible to file for bankruptcy “pro se” – or on your own – statistics show that hiring an attorney will make the process easier regardless of whether you choose Chapter 7 or Chapter 13 bankruptcy.
According to the American Bankruptcy Institute, lawyers represented consumers in 91.5% (486,347) of Chapter 7 cases filed in 2017. In 96.2% of the cases, lawyers had their clients’ debts discharged. In other words, 428,097 people were discharged of their debts and walked out of court without any outstanding debt.
However, Chapter 7 bankruptcy people who represented themselves were only 66.7% successful.
Consumers who choose Chapter 13 bankruptcy are subject to even more severe statistics. Only 2.3% of consumers who represented themselves were successful. This number rose to 41.5% when debts were paid off after the client had completed a repayment plan.
If your financial situation has deteriorated and you need protection from creditors as well as relief from your debt obligations, a bankruptcy attorney like Tenina Law could be the right choice to help you get a fresh start.
What Should I Expect From a Bankruptcy Attorney
Like most legal issues, bankruptcy is a process. If you are determined to succeed, we can help you navigate the process.
A 30 to 60 minute interview between you, your lawyer, and the bankruptcy process begins. Both spouses should be present if you are married. This will allow for honest and accurate answers. We will explain your options, including the possibility of filing bankruptcy without your spouse.
It is not a good idea to guess how much you owe or who it is to. An attorney will need documentation to back up your answers about how many assets you have, and how much debt you owe. If you want an accurate and honest assessment of your situation, don’t hesitate to share everything. Your attorney can only give you the best advice if you are honest and truthful with your information.
If the attorney has sufficient evidence to evaluate your case, they should give advice about how to proceed. An attorney who is competent will not recommend bankruptcy. Sometimes, a less drastic solution is possible, such as debt settlement or a debt management program.
If you decide to file for bankruptcy with a lawyer, then the next step is to have your paperwork filed with the court. The attorney will do everything possible to protect your assets. Please let the court know what you think is important.
The type of bankruptcy determines the next steps. For a Chapter 7 bankruptcy case, you will appear before a Chapter 7 trustee to review your bankruptcy petition. Your lawyer will usually do the bulk of the work in most cases. These meetings can be painless by using an attorney to provide detailed and complete schedules as well as back-up documentation for the trustee.
What Do I Need to Know About a Bankruptcy Attorney?
Consumers can choose to hire an attorney, or to represent themselves when filing bankruptcy. However, as the American Bankruptcy Institute numbers clearly show, hiring an attorney is a significant advantage.
This subject has a lot of math.
- One in 25 Chapter 7 consumers who use an attorney are denied a discharge. A third of those who file Chapter 7 on their own do not get a discharge.
- About one in fifty consumers who file Chapter 13 for themselves receive a discharge. Hiring a lawyer can help you succeed better than four out of ten.
These are the reasons why bankruptcy can be a complicated subject. Consumers who claim they don’t have enough money want their creditors to pay them. Both sides have lawyers trying to convince judges they are right.
You could make a huge mistake if you’re not proficient in drafting legal documents and arguing your case persuasively. An experienced attorney will know when and how to meet the filing deadlines for a case. Also, an experienced attorney is familiar with the names and arguments of the judges to obtain the desired result.
Incorrectly completing paperwork can lead to disastrous results. A mistake in paperwork could lead to the Chapter 7 trustee selling your house. These types of errors are not common when you use an attorney but can happen frequently if you file your own paperwork.
This is why an attorney can have a higher success rate than trying to file your own case.
Signs That You Need a Lawyer to File for Bankruptcy
Financial distress is rarely something that happens suddenly or overnight. It is usually gradual and there are many warning signs that things are getting worse.
If you ignore warnings, your finances could go up in flames. It might be too late for you to do anything except declare bankruptcy.
Obvious signs that you might be facing bankruptcy:
- Overdue bills are only eligible for minimum monthly payments
- You have maxed out credit cards and your debt is increasing, not decreasing each month
- A job loss, divorce or medical setback turns your finances upside down
- You are not eligible for programs such as debt management and consolidation loans
- You pay overdraft fees each month
- Collection agencies call your home every day of the week
- Unpaid debts have led to creditors threatening or suing you
- You use credit cards to pay for everyday expenses such as groceries, rent, or utilities
Although bankruptcy is not the best option for debt relief, it can be an effective solution in some cases. However, bankruptcy also has its downsides. It can cause credit damage for up to 7-10 years, and it can be a barrier to obtaining security clearances. But if you are unable to resolve your problems within five years, bankruptcy may be an option.
At Tenina Law, we have over 20 years of experience and dedication to serving our clients. Our extensive expertise in these practice areas guarantees the best outcome for all of our clients! Have questions about your particular case? Contact us today!