Even in the best of economic times circumstances often force a person to look for a way to resolve financial issues. Bankruptcy is a government created and sanctioned method to relieve financial pressures.
The assistance offered by a bankruptcy lawyer can start well before the bankruptcy is filed.
A bankruptcy attorney will have the experience necessary to gauge not only if a bankruptcy is necessary, but also when it is most advantageous to file. Sometimes, the knowledge that an attorney has been retained and a bankruptcy is poised and ready to be filed can cause a creditor to reevaluate their position and try to work with the debtor by waiving interest and reducing payments.
Personal Bankruptcy Options - Chapter 7 Bankruptcy or Chapter 13 Bankruptcy
One of the first ways in which a bankruptcy lawyer provides bankruptcy help is in determining which method is the most appropriate for that person's situation. There are two main types of consumer bankruptcy available.
The first type is known as a Chapter 7 bankruptcy. This is also known as a liquidation bankruptcy and is a method to completely wipe out all non-exempt debt and selling all non-exempt property to pay to creditors. The bankruptcy exemptions vary from state to state. In a Chapter 7, a trustee is appointed by the court who gathers all of the assets that are not exempt and sells them, then uses those proceeds to pay specific creditors.
The second type of bankruptcy that can be chosen is a Chapter 13, which is also known as a reorganization or rehabilitation. It is a lot more involved than a Chapter 7 since the objective is to restructure the debt in such a manner so as to allow the person filing bankruptcy to pay more of their debts, usually over a three to five year period, and retain more of their non-exempt assets. A trustee is also appointed to oversee this process.
Knowing which type of bankruptcy to file require a careful examination of all the facts and circumstances, and a bankruptcy attorney can provide information and advice.
Protection During Bankruptcy
A lawyer in a bankruptcy law firm can also assist someone filing bankruptcy by acting as protection between them and the trustee and the creditors.
Trustees are paid based on the amount of assets they can gather and dispose of to pay the creditors. Thus, it is in their best interest to classify assets as non-exempt. Often, knowing how to phrase something or classify property can mean the difference between retaining an asset and being forced to dispose of it. A personal bankruptcy lawyer will usually have an extensive knowledge of the state's exemptions and allowances allowing them to protect as many assets of the debtor as possible.
Sources:
Federal Court System, accessed 8/30/2010
Bankruptcy Action, accessed 8/30/2010
Nolo, accessed 8/30/2010
Robert Bennett - Robert Bennett is a part time traveler, a more than full time dad, and has recently started in the exciting world of freelance writing. In ...
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