If you’re stuck in debt, filing for bankruptcy can be a great way to resolve your financial difficulties and start rebuilding your credit. However, you might hesitate to take the first step because you equate bankruptcy with giving up, or you are intimidated by the prospect of hiring a lawyer to help you through the process.
The Legal Helpers will be your first and best resource if you are in a position where bill collectors are calling every day and you are overwhelmed by where to begin. We will connect you with a bankruptcy attorney in your community who will treat you and your situation with sensitivity and respect, and who will explain each step of the bankruptcy process in clear language.
Do You Need a Lawyer to File for Bankruptcy?
It is possible to file for bankruptcy without a lawyer’s assistance. Their primary reason for not retaining a bankruptcy attorney is to save money by not having to pay an attorney’s fees. If you do not own significant amounts of property or you are not dealing with a large number of creditors, you might be able to manage the process successfully on your own.
If your financial situation is more complex, the cost of hiring an experienced bankruptcy lawyer may be justified by his or her ability to help you shield a greater amount of your assets from your creditors. A bankruptcy lawyer may even help you to avoid a foreclosure on your house.
The details of bankruptcy law can be confusing, and their application varies from state to state. Consider, for example, these issues:
- Should you file your case in Federal or State Court? States often have more generous exemptions, particularly with respect to homes, but bankruptcy cases are often governed by the provisions of federal law. Knowing where to file your case is a crucial first step in the bankruptcy process.
- Do you file for Chapter 7 or Chapter 11 bankruptcy? A chapter 7 bankruptcy allows a debtor to eliminate unsecured debts by surrendering assets that are liquidated to pay a portion of those debts. Alternately, a chapter 13 bankruptcy establishes a 3 to 5-year payment plan for outstanding debts.
- What exemptions are you entitled to claim? Every state will allow you to keep a certain portion of your assets. A bankruptcy attorney will work to let you keep a greater amount of those assets.
- Are you comfortable negotiating with the court-appointed bankruptcy trustee? The trustee will sell a property that is not exempt and distribute the sale proceeds to your creditors. A bankruptcy lawyer will make sure that your best interests are represented in negotiations with a trustee.
Do You Understand the Long-Term Effects of Filing for Bankruptcy
A successful bankruptcy filing will give you a fresh start, and it can stop your creditors from bothering you. It may also allow you to completely cancel certain debts and avoid paying taxes on that canceled debt. On the downside, you should understand that bankruptcy will linger on your credit record for 10 years from the bankruptcy filing date. This will make it difficult for you to qualify for a mortgage, and it will increase the interest rates that lenders charge when you take on new debt.
Prior to filing your bankruptcy case, a bankruptcy lawyer might be able to engage your creditors directly to negotiate payment plans. As long as you adhere to those plans, you might be able to avoid a bankruptcy filing. This, in turn, can help you to protect your credit records as you emerge from your financial difficulties.
How Much Do Bankruptcy Lawyers Charge for Their Services?
Most bankruptcy lawyers charge between a few hundred and a few thousand dollars for a Chapter 7 bankruptcy. Chapter 13 bankruptcies are more complex. If you need to file under Chapter 13, your legal fees will typically be between $2,500 and $4,000. These are only general estimates, and the actual legal fees you pay will depend on how complex your case is and how much time your bankruptcy lawyer will need to take your case from filing through to completion.
Legal Helpers Can Connect You With the Right Bankruptcy Lawyer for Your Unique Case
Please contact the Legal Helpers to get connected with a knowledgeable and experienced bankruptcy attorney near you. Working with a seasoned and effective bankruptcy lawyer can be the first step toward resolving your debt and rebuilding your personal finances.
- Filing Bankruptcy Without a Lawyer: Can or Should You?
- Filing Bankruptcy: What You Need to Know About Chapter 7 vs. Chapter 11 vs. Chapter 13.