When filing for bankruptcy, it’s essential to hire a trusted bankruptcy attorney. You need a professional on your side who can guide you through the process and protect your interests. Trying to navigate the paperwork, documentation, and meetings on your own can be daunting – and can result in a much less favorable outcome as you don’t know the ins and outs of the bankruptcy laws. The old saying goes people who represent themselves may have a fool for a client. This is often the case in bankruptcy as well as criminal law.
Attorneys can provide the following assistance during your bankruptcy case:
- Protect your assets: There is a common misconception that you will lose all of your property when you file for bankruptcy. Rest assured, this is not true. With the help of your attorney, you can make some (or all) key assets “exempt,” which means they cannot be sold to repay your debt. When you file for bankruptcy, the court’s goal is that afterward, you can begin with a fresh start in your life, free from debt. If the court takes all of your assets, you will not have anything to start your new life with. Because of this, your attorney will work with you to determine what assets are necessary for you to live your daily life, and even work. This can include your vehicle, work equipment, household goods, clothing, furniture, and more. Items exemptions sometimes cannot cover are property the court can determine is very valuable, such as a second vehicle with a lot of equity, jewelry beyond your wedding sets such as a 4-karat diamond, valuable collections, very expensive and collectible musical instruments – things like this. Your attorney will know what items you are allowed to mark exempt.
- Pick a Chapter to File: When you file bankruptcy, there are numerous chapters to select from. For individuals, the most common two options are Chapter 7 and Chapter 13. You need an experienced attorney to advise you as to which one is right for you and your circumstances and to explain the differences. If you have a regular income, Chapter 13 might be the best option for you. This allows you to set up a repayment plan with the court to pay off some of your debts over three to five years. At the end of the plan, any remaining debts may be discharged. If you qualify for a Chapter 7 case, then Chapter 7 can be the better solution for you. Under this chapter, you will need to liquidate some of your assets (if you have nonexempt assets – often times Chapter 7 filers do not have assets like this.) to repay some of your debt, but there will is typically not a long term repayment plan like in Chapter 13 (although there can be short repayments plans if the asset value is low enough). Any remaining debts will likely be discharged.
- Determine What Debts Are Eliminated: A bankruptcy attorney can help you determine what debts you will be able to eliminate through either Chapter 7 or Chapter 13. In Chapter 13, you must pay all of your priority debts. This can include past due child and spousal support, most recent tax debts, and any wages or salaries you owe to your employees. You will also need to pay most of the money you owe on secured debts, including your cars and any arrearages your may owe on your mortgage. You may not have to repay all of your unsecured debts, which can include your credit card debt and medical bills. If you file for Chapter 7 bankruptcy, you will be able to discharge debts that include credit card bills, medical bills, personal loans, utility bills, auto accident claims, business debts, past-due rents, most civil court judgments, and more. Like under Chapter 13, you will not be able to discharge child and spousal support debt.
- Resolving Means Test Issues: To file for Chapter 7 bankruptcy, you need to complete a means test to prove you cannot afford to repay your debt. This test looks at your income, expenses, and family size to determine if you have enough disposable income to repay your debts. If you do not pass this test – meaning you’re not eligible to file Chapter 7 – you need to look to Chapter 13 for bankruptcy assistance.
- Protecting Other Assets: An experienced attorney can help you keep most of your property during bankruptcy proceedings. A bankruptcy lawyer can help you determine what assets the court might take and help you protect these valuable items and property. This can include money you won in a lawsuit and other items.
Let Us Help You With Your Bankruptcy Case
When you’re considering filing for bankruptcy, let our lawyers at The Law Offices of Alexzander C.J. Adams, P.C. help you sort through your options and provide you with help and advice. We work for you, the people, and not institutions. Contact us for a free case evaluation, or no-obligation consultation. We are dedicated to helping you overcome this small bump in the road and assisting you to get on with your life.