How Bankruptcy Attorneys Can Help You Deal With Insolvency

Bankruptcy is unfortunate and can happen for any reason, be it some faulty life decisions or sheer bad luck. However, bankruptcy laws are in place to support people having their finances collapsed and looking for a fresh start. For making it happen, you must follow the right procedures and hire experienced attorneys like

When Should You Declare Bankruptcy?

Experts would say that there is no ideal time for bankruptcy declaration. However, note the time needed to clear all your debts. If you think it would take over five years for complete debt clearance, filing for bankruptcy may be a wise choice.

A bankruptcy attorney can make suitable filing suggestions depending on your situation. Here are some snippets of what you can expect from their expert advice:   

When Filing Makes Sense

  • When large debt amount begins to overpower you
  • You are unable to repay even the minimum amount due on your credit account
  • No anticipation of a cash influx in the near future
  • Getting notified by your employer with a wage garnishment
  • When you are unwilling to tap into your retirement account for clearing debts
  • When served with a lawsuit, and you wish to avoid the judgment

When Filing Is Not Necessary

  • When you have no income or property that can be collected by the creditors
  • You have a recent bankruptcy filing and not eligible to receive another discharge

When Filing Is A Bad Idea

  • If you have furnished false financial information to your creditor while obtaining a credit
  • Property transfer to a friend or relative to avoid paying the creditors
  • If you have knowingly used business assets for personal reasons
  • If another lawsuit, in another court, accuses you of a fraud

Types Of Bankruptcy

There are several types of bankruptcies that can be filed by individuals or married couples. Do not hesitate to seek an attorney’s help to understand their impact on your finances. 

Chapter 7

This popular option is suitable for those with low income and fewer assets. It offers you a chance to have the court release you from debt payment while retaining the key assets that are “exempt” properties. The Non-Exempt property will, however, be used to pay off a part of your debts. Check with your attorney about the list of exempt and non-exempt properties applicable to your case. 

Chapter 13

Here, you will only be repaying a part of your debt, while the rest will be forgiven. This is suitable for families not willing to give up their property or those who do not qualify for chapter 7 bankruptcy. This bankruptcy type places a limit on the maximum debt amount that you can incur. These figures are periodically revised and hence require an expert consultation for getting up-to-date figures.

Chapter 11

Also termed as reorganization bankruptcy, it enables businesses to continue operations while restructuring the assets and debts. Companies of any size may file for this type of bankruptcy, including partnership and sometimes, even individuals.

Chapter 12

This applies to family fishermen and family farms and helps them plan repayment of all or part of their debts. There are strict qualification rules, and only a person gaining regular income as a fisherman or farmer becomes eligible.

When Might a Bankruptcy Case Be Dismissed?

Bankruptcy attorneys like, with their years of experience, can point the grounds for bankruptcy dismissal. These may include:

  • Bankruptcy Fraud: Embracing practices like falsifying documents, or hiding of assets, to paint a dishonest picture of your financial situation may call for the dismissal.
  • Not Completing the Credit Counseling Course: An approved credit counseling class must be completed, and a relevant certificate must be filed. Failing to comply with this instruction will cause your bankruptcy request to be dismissed.
  • Not Appearing for the Meeting With Creditors: Both Chapter 7 and Chapter 13 bankruptcies require you to attend the creditors’ meeting for accepting your bankruptcy request. 

Credit card debts, mortgage debt, student loans, medical bills, or a combination of these cause financial devastation on families. When you don’t see the situation changing, bankruptcy might be your best option. Don’t hesitate to seek an expert’s help to guide you through these rough waters.

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