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Bankruptcy Attorneys
Having a bankruptcy attorney has become more important than ever with recent changes to bankruptcy laws. A bankruptcy attorney specializes in all aspects of bankruptcy law, and can be of tremendous aid to a client hoping to file for bankruptcy. A good attorney will make sure a client declares the right kind of bankruptcy, and only when absolutely necessary, helping clients navigate the grueling process of debt management with as little pain as possible.
There are five different types, or “chapters” of bankruptcy. The two most common declared by individuals are Chapter 7 liquidation, and Chapter 13 reorganization. Chapter 7 bankruptcy is a process where a debtor’s non-exempt assets are “liquidated” (i.e., sold for money) and those proceeds are then turned over to creditors to pay off debt. Once a debtor’s assets have been totally liquidated, his debt is generally deemed cleared and he can begin the climb back to financial stability.
In recent years, new laws have made it much more difficult for an individual to claim Chapter 7 bankruptcy. Now debtors must take strict financial means tests, approved debt management classes, and consult with an approved credit counselor, all before they can even file for Chapter 7 bankruptcy. Moreover, the new laws make it easier for a court to dismiss a Chapter 7 claim, or convert it to the more creditor-friendly Chapter 13. A good bankruptcy attorney will know how to work within the new laws to still get you the Chapter 7 claim you are hoping for. If you find you don’t qualify for Chapter 7 like you’d hoped, a good bankruptcy attorney will be able to steer you towards some similar options.
Chapter 13 bankruptcy is a process where an individual uses future income as collateral for a payment plan that will clear their debt with creditors. Chapter 13 is advantageous in that the interest on debts often gets lowered significantly, if not halted altogether, making it much easier for debtors to climb out of their hole. And unlike Chapter 7 bankruptcy, Chapter 13 allows for debtors who make their payments on time and consistently to be fully discharged from their repayment plan, with no strings, once their debt is cleared. Most importantly however, is that under Chapter 13, creditors do not have final say on the terms of a repayment plan—the court always has final say. If you have a good bankruptcy attorney by your side, he or she will know how to come up with the best payment plan for your situation, and then get it approved. Once you know you have a payment plan that you can afford each month, the climb back to financial stability is as easy as making your payments on time, and consistently.
Another added bonus of having a bankruptcy attorney is that they can recommend the best trustees to use when clearing your debt. Trustees are third party institutions who handle the transfer of funds or liquidation of assets between debtor and creditor, keeping careful records so that the neither side can later claim that the terms of repayment were in anyway violated. Having a good trustee is like having a good mediator: everything goes more smoothly.
Many of today’s bankruptcy attorneys can be located online and offer free initial consultations. In most cases, a good bankruptcy attorney will steer debtors away from declaring bankruptcy and toward more traditional forms of debt consolidation or elimination. As they work with those in serious financial difficulty, many attorneys will negotiate a reasonable fee for their services. If you know that you must file for bankruptcy, be absolutely sure to meet with a bankruptcy attorney first. They are the sturdy ships that can steer you through the most turbulent financial waters you will ever face.
Topics: Credit Repair |
