How To Get The Best Bankruptcy & Debt Lawyer
In this age of economic uncertainty, it is not uncommon for people to face financial troubles amidst bank loans and credit card debts. Fortunately, one can file for bankruptcy to avoid falling into a miserable situation. Bankruptcy is a legal procedure that individuals and businesses can use to get relief when they are struggling to repay debts.
Filing for bankruptcy helps you improve your finances by wiping out a part of unsecured debt and entering into a repayment plan with better terms. It gets you rid of debt lawsuits, debt collection calls, and notices and sorts through your financial problems. It can save you from losing your car and home and help start a new life with organized finances.
Individuals can file a bankruptcy without a bankruptcy & debt lawyer but it is advisable to get an experienced bankruptcy & debt lawyer to represent you. The reason is that bankruptcy law is complicated and specialized and can turn out to be more complex than you may have expected. A single improperly filled form can get your case dismissed and keep you waiting for another six months to file again.
So What is bankruptcy?
Bankruptcy is a legal process that gives individuals and businesses a fresh start by eliminating or reorganizing their debts. It is a way for those who cannot repay their debts to find relief and regain control of their financial lives.
Bankruptcy is a powerful tool that can help individuals and businesses eliminate or reduce their debts, stop creditor harassment, and prevent foreclosure or repossession. Bankruptcy will allow debtors to start over and rebuild their financial future..
Why bankruptcy is necessary?
Bankruptcy is necessary because it provides a fair and orderly way to resolve debts when other options have been exhausted. It offers a legal framework for debtors to negotiate with their creditors and come to a mutually beneficial resolution. Without bankruptcy, individuals and businesses would be left at the mercy of their creditors, with no way to protect their assets or negotiate a reasonable repayment plan. Bankruptcy provides a safety net for those who are overwhelmed by debt and offers them a chance to get back on their feet.
Should you fill for bankruptcy?
Many self-representing filers end up being in worse situations than before, losing their possessions without wiping off any debts. Bankruptcy and debt lawyer guide you through the process and ensure all your paperwork is done accurately. However, it is worth taking the time to understand your needs and find the right advocate who can help you file successfully for bankruptcy.
In this comprehensive guide, we try to address all the concerns associated with finding the best bankruptcy & debt lawyer in the United States and discuss the various considerations and costs associated with hiring a bankruptcy & debt lawyer.
What are Bankruptcy & Debt Lawyers?
Bankruptcy & debt lawyers are specialized lawyers who possess the skills, knowledge, and credentials to help people struggling with debt get through their financial troubles through a bankruptcy filing. These attorneys specialize in giving legal advice about bankruptcy, preparing documents, and representing the client in court on this legal proceeding.
Debt and bankruptcy lawyers have recently become more prominent in the country as household debt has grown by 11% from the last decade with auto and credit card loan debts crossing a trillion-dollar mark. This has also led to a rise of debt collection agencies in the U.S., many of which use aggressive methods to recover money. A debt lawyer can help you fight back against these aggressive collectors in court, explain to you your rights, and provide a way to escape threats and harassment.
Apart from offering legal advice, preparing legal paperwork, and helping with court proceedings, bankruptcy and debt lawyers protect clients from creditors and help them clear their debts. These lawyers hold a degree in law and a license to work in the state.
What advices you should get from your Lawyer?
The attorney serves you as a guide through the process and advises on:
- Whether bankruptcy is the best option for you
- The type of bankruptcy that suits your situation
- The procedure of bankruptcy
- The forms to be completed
- What debts can be eliminated
- Whether you can retain your car, home, and other assets once the bankruptcy case has proceeded
A bankruptcy and debt lawyer essentially guides you in the right direction and ensures you abide by the law all the time. When you handle a case without a lawyer, there are chances you make legal mistakes carrying serious financial implications.
Some of the duties you can expect bankruptcy and debt lawyers to fulfill include:
- Outline the entire process of filing a bankruptcy
- Assess your financial situation to weigh the pros and cons of bankruptcy
- Create payment plans
- Handle creditors
- Help get out of debt faster
- Prepare paperwork including the proof of income, expenses, and assets
- Handle court proceedings
A bankruptcy and debt lawyer has so many duties that ensure clients receive the support they need throughout the filing process. Overall, these lawyers help achieve the real purpose of bankruptcy – find a way to free yourself from financial troubles, protect yourself and assets from debt collectors and provide relief from debt obligations.
Types of Bankruptcy & Debt Lawyers
Bankruptcy & debt lawyers can be divided into two categories – Commercial and Consumer. The type of lawyer you choose depends mostly on the kind of bankruptcy you want to proceed with.
Commercial – These bankruptcy and debt lawyers are responsible for the liquidation of businesses. A commercial lawyer offers legal advice, prepares paperwork, and represents the business in court to help them clear debts. They perform all the tasks related to bankruptcy filing and request time to get the business restructured.
The most common type of bankruptcy for businesses is Chapter 11 which facilitates reorganization to keep the business alive by borrowing new money to clear debts.
This type of bankruptcy is for corporations that require some time to restructure their debt which has become unmanageable. Another commercial bankruptcy type is Chapter 7 where the company simply liquidates the assets to pay off debt and goes out of operations.
Consumer – A consumer bankruptcy and debt lawyer is dedicated to helping individuals file personal bankruptcy.
These attorneys represent the consumers before the court, help them decide what type of bankruptcy they should file, and take care of the paperwork to get them free of creditors with a convenient repayment plan.
They also answer all the questions one may have and explain the rules and procedures associated with a bankruptcy filing.
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Consumers have options for the type of bankruptcy they want to file. The options are described in the federal law as chapters. Individuals generally file under Chapter 7 or Chapter 13 though some choose Chapter 11 or 12. The most common type is Chapter 7 bankruptcy which is also called liquidation bankruptcy. In this case, the court appoints a trustee who sells the person’s assets and distributes the cash among creditors to wipe out debts.
On the other hand, a Chapter 13 bankruptcy case which is also known as the repayment or wage earner’s plan, approves a repayment plan to let you clear debts in a period of 3-5 years. Such a bankruptcy allows retaining assets you may lose in a Chapter 7 case. A consumer lawyer should assess your situation and finances to decide between Chapter 7 and 13 bankruptcy.
Why You Should Hire A Bankruptcy & Debt Lawyer?
Individuals filing for bankruptcy are free to represent themselves; if your case is straightforward, this can save you money spent on the lawyer’s fees. However, it is not always recommended.
If you are filing for a Chapter 13 bankruptcy or you have valuable assets, handling the case yourself might cost you more than you would save.
A 2017 report suggests that about 91% of the Chapter 7 cases were represented by lawyers of which 96% of clients got their debts cleared. On the contrary, only 66% of people representing themselves were successful.
For Chapter 13 bankruptcy, only 2% of consumers representing themselves were successful according to the report. These stats make it clear that a bankruptcy and debt lawyer is essential if your debt situation is going to court and you want relief and protection from obligations.
When debt collectors go to court to recover their owed money, they win most of the time as people don’t defend themselves. They are often ignorant of their rights and fail to represent themselves effectively.
It can seem confusing and daunting to represent yourself in court and complete all the paperwork without any help.
How can a bankruptcy lawyer help you?
A bankruptcy & debt lawyer handles the legal matters on your behalf, keeps all the documents on track, and identifies any hiccup that could arise in your case to take proactive measures. An experienced lawyer saves you from any disastrous consequences of errors in paperwork.
You have somebody with expertise by your side who can make compelling arguments in your favor in front of the judge.
Hiring a bankruptcy & debt lawyer is particularly important when you are having a hard time dealing with your creditors. If your collectors are constantly threatening you, it is a good idea to hire a lawyer to deal with them.
A lawyer can also quickly determine if the debt collector is using any illegal methods to recover money. He can help prepare a lawsuit against the creditor who has violated any laws in an attempt to collect.
The attorney can also negotiate with your creditors to help you keep your valuable assets like car or home or on the repayment plan to make it more affordable for you.
What You Should Know Before Talking To A Bankruptcy & Debt Lawyer?
A law service can be expensive, so the first thing you should know before hiring one is whether you can afford to pay the lawyer. When you are already facing financial issues, it is worth considering if retaining a lawyer would help you improve your finances.
Spending your limited resources on an attorney for a weak case can be a wrong decision. Moreover, before deciding to talk to a lawyer, review your situation. If you find that you owe what the creditor is claiming and he has a legal procedure to collect, a lawyer might not be able to help you.
If you are being threatened by the creditor, you may hire a lawyer to defend you. In case the creditor has violated the prescribed procedure for collection, an attorney might help you by filing a counterclaim against the debt collector.
Also, there are some chances of legal defenses. Sometimes, the creditor might not have the required paperwork to claim or may have filed in the wrong court. At other times, the period for collecting the debt might have expired. In such cases, your lawyer can help you file a defense and the court can rule in your favor. Make sure you evaluate all such situations before talking to your lawyer.
You should also know the law and procedures pertaining to your bankruptcy case. It is important to be aware of the types of bankruptcies and the code and terms associated with the law.
This should help you ask relevant questions to your lawyer and determine if he can best represent you and handle your case. Get an idea of the attorney’s fees to find out if your budget permits hiring him. Also, try to figure out how your case will be dealt with and how much time it will take to resolve.
Where can i find a bankruptcy lawyer?
There are several ways to find options for bankruptcy & debt lawyers in the US, while our own directory is a great place to get started. Apart from this, you can make sure attorney’s are members of the National Association of Consumer Attorneys (NACA) and the American Bankruptcy Institute (ABI), which can ensure they are wellversed with the recent rulings in the field of bankruptcy.
Most attorneys would offer you a free consultation though many can charge a small fee for the first meeting. Don’t make the mistake of assuming that a free meeting means a less-qualified attorney; it is a good idea to have free meetings with a few lawyers to choose the best one.
See that you check whether the attorney possesses the right expertise and experience to help you. Look at their background and certification and the number and nature of cases they have handled.
Before talking to your lawyer, make sure you are aware of ‘bankruptcy mills’ which are law firms that handle a large number of cases at the same time and fail to give you the time and attention you need.
You should expect to have a 30-60 minute interview with the lawyer wherein he/she checks your documents to offer you legal advice on proceeding. A good attorney may suggest bankruptcy alternatives like a settlement or a debt management program depending on your situation’s assessment.
How Much Does It Cost To Hire A Debt Lawyer?
When you have accumulated a mountain of debts, hiring a debt lawyer can add to it. However, choosing the right attorney can help you through the legal proceeding and improve your finances, getting you back on track. Most law firms offer a free visit for debt consultation.
There is no fixed amount a debt lawyer could charge though Chapter 13 bankruptcy filing is more expensive than Chapter 7. The lawyer’s fee also varies between states and cases.
Generally, a debt lawyer’s fee depends on how much effort your case involves. If you want the lawyer to negotiate with the creditors, you can go for the entire process or choose to pay for a specific task like documentation.
Bankruptcy & Debt Lawyer Fees:
| Fee Type | Price |
|---|---|
| Chapter 7 Filing Fee | $335 / Filing |
| Chapter 13 Filing Fee | $310 / Filing |
| Chapter 7 Bankruptcy Attorney Fees | $1,500 To $3,000 / Case |
| Chapter 13 Bankruptcy Attorney Fees | $3,000 To $4,000 / Case |
| Debt Negotiation Attorney Fees (Hourly) | $125 To $350 / Hr |
| Debt Negotiation Attorney Fees (Flat) | $500 To $5,000 / Case |
| Debt Negotiation Attorney Fees (Percentage) | 3% – 5% of Total Outstanding Debt |
| Attorney Fee Based On Amount Saved (Percentage) | 12% – 15% of Total Amount Saved |
Bankruptcy & debt lawyers usually charge by the hour and ask for an advance payment. Make sure to ask upfront how much the lawyer will charge. One can expect to pay anywhere between $500 and $4000 for a case of Chapter 7 bankruptcy and $1500-$6000 for Chapter 13. The price can go up with the complication of the case and the expertise of the lawyer.
Talking about the cost of negotiating with the creditors, your lawyer can either charge a flat fee depending on the number of creditors you have or ask for an hourly fee. The hourly rate generally depends on the area you live in and the lawyer’s experience and reputation. Sometimes, an attorney can charge you on the basis of your debt amount. It is generally a percentage of the amount he negotiates on your behalf. Some lawyers can even charge you on the amount saved from negotiation and settlement.
Things To Prepare Before Talking To A Bankruptcy & Debt Lawyer
Before you get the first appointment with your bankruptcy and debt lawyer, it is important to prepare yourself well for the procedure. Firstly, curate a few options for lawyers based on your budget and the complexity of your case.
Apart from personal referrals and agencies, use your own research to find the best lawyer. Use government sites and online searches to check the lawyer’s history. Also, ensure the attorney has proper licensing.
During your first meeting, pay attention to your communication with the lawyer. See if you are being comfortable opening up to him/her about your finances and concerns. Finding the right attorney to represent you ultimately depends on having a compatible personality.
Gather all the paperwork associated with your debts and finances. Prepare a log of your creditor contacts including the date and time of their phone calls and visits and the emails they have sent. While all of this might not be utilized, it is a good idea to document everything related to your debt.
The attorney would want documents that clarify how much you owe and what assets you have. Make sure you don’t hold back anything if you want an accurate assessment of your situation. Remember the advice you get from your lawyer is only as good as the details you provide.
Many consumers feel shy or embarrassed about their financial situation when talking to a lawyer. It is important to remember that bankruptcy lawyers handle cases like yours every day and their job is to help clients, not judge them.
Summary
Filing for bankruptcy is a critical decision that involves a lot of consideration. Before you proceed with this decision, it is a good idea to hire a bankruptcy & debt lawyer who can help you figure out whether you should take this course of action.
These lawyers guide you through the entire process and ensure that your bankruptcy case proceeds smoothly.
Bankruptcy proceedings can have long-term consequences on the life and financial situation of an individual, so it is important to pick an experienced lawyer who can get you out of the debt quickly, protect your assets and rebuild credit.