Few situations are more stressful than having more debt than you can manage. At those times, declaring bankruptcy might be your best option, but it’s a complicated process. Before you go down that road, you should understand what bankruptcy is and whether or not you need a bankruptcy attorney.
Hiring a bankruptcy attorney might seem 100% counterintuitive—you might say, “I don’t have any money. How am I supposed to pay a lawyer?” While that feeling is understandable, there are a few reasons it’s still a good idea to at least talk to an attorney before making a decision.
Choosing the Right Bankruptcy and Knowing Your Rights
There’s not just one kind of bankruptcy; there are different options that might be better or worse, depending on your situation. The two most common types of bankruptcy for consumers are Chapter 7 and Chapter 13.
Under Chapter 7, also called liquidation, all dischargeable debts will be wiped out at the end of the process, but your assets can be seized and sold off to pay your creditors.
Chapter 13 bankruptcy is quite different. Called a wage-earners plan, Chapter 13 bankruptcy lets the debtor negotiate a repayment plan. After making the required payments for three to five years, the debts are then discharged, usually without liquidating any assets.
Though bankruptcy is handled exclusively by federal bankruptcy courts, state laws should be considered. Crucially, California bankruptcy laws have generous exemptions that protect many of a
the debtor’s assets from liquidation. If you don’t understand how these exemptions work, you may end up unnecessarily agreeing to sell off assets.
Proper Filing and Documentation
Declaring bankruptcy is a fairly complex and document-intensive process. It is easy to file your paperwork incorrectly or forget to include certain documents. Such mistakes can draw things out longer than necessary but also have more serious consequences. There are also filing deadlines that, if missed, can potentially prejudice your case.
It’s possible to navigate the legal and bureaucratic aspects of bankruptcy on your own, but it won’t be a very pleasant experience. An experienced lawyer can greatly cut down the stress of it.
No More Dealing with Creditors
The one thing most people want more than anything when they’ve reached the point of considering bankruptcy is to be done with the endless harassment from creditors. Once a person files for bankruptcy, an automatic stay goes into effect. This means that, in theory, creditors must cease trying to collect any debt from you.
In reality, some debt collectors will not stop harassing you, especially if they don’t think they’ll get much via bankruptcy. They may continue contacting you, trying to get as much money as possible. If you have an attorney, insist that any further communications go through them. If the creditors persist, your lawyer should be able to stop it.
Talk to a California Bankruptcy Expert
You don’t have to go through bankruptcy alone. Our attorneys know the process inside and out and can eliminate much of the stress in what is already a very difficult time. We also know how to work out a fee arrangement that works for you and helps you put you back on your feet. Contact us today to schedule a consultation.