What
is bankruptcy - meaning and definition
The Merriam-Webster dictionary defines bankruptcy as the condition of being bankrupt. It is essential to understand the meaning of bankruptcy.
A bankrupt is a debtor that may be an individual or organization whose property is subject to treatment under bankruptcy law to recover the debt of creditors.
Who is a bankruptcy lawyer
A bankruptcy lawyer is a type of lawyer or attorney who specializes in providing legal support to clients filing for bankruptcy. Such a lawyer prepares the legal documentation and appears for the client in court.
Besides facilitating you on filing bankruptcy, the attorney guides the client on several aspects of bankruptcy that including file/not-to-file, types of bankruptcy to file and educating on the process. They also guide you on the various forms.
Different Types of Bankruptcy
Bankruptcy can be divided into two major types. Here we define these types briefly.
Chapter 7 Bankruptcy
It is the most common form of bankruptcy. In this bankruptcy type, there is a provision for the liquidation of assets to pay creditors. And it is why it is called Straight or Liquidation Bankruptcy. This bankruptcy is ideally suited for businesses that are not able to pay monthly debts and wish to sell assets for cash.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is applicable to wage earners, self-employed, and single-ownership businesses. And it is why it is also called the wage earners plan. In this type of bankruptcy, the court gives you a period of 3 to 5 years to pay off your debt.
What can a bankruptcy lawyer do for you?
Bankruptcy proceedings require a series of meetings with creditors. These meetings will be convened by a court-appointed trustee. Here, your creditors and their attorney will ask a series of questions to know about your financial status and why are you filing a bankruptcy claim.
By having an attorney on your side, you can rest assured that you are protected and that your meetings have been completed well.
Helps you navigate through the legal process
The US bankruptcy law is highly complex and you need an experienced attorney to navigate through it. Every bankruptcy situation is different and has its own legal requirements. Besides, every court has its own set of rules that should be understood for maximum effectiveness.
An experienced lawyer will guide you on how to negotiate this complex process related to law and tilt the scale in your favor.
Helps you deal with the paperwork
Filing for bankruptcy requires you to complete complex paperwork. Every chapter has its own form which is different from other. Any negligence at this stage may lead to the dismissal of your case. No doubt, you won’t be taking chance. Different forms are used for defining property, income and expenses.
Owing to the complex nature of paperwork, people make sure that there is a knowledgeable bankruptcy lawyer on their side.
Collecting records
Filing bankruptcy requires the submission of a number of records collecting them is a herculean task. Collecting such records require a good understanding of bankruptcy law. You can’t do it on your own. On the other hand, a bankruptcy lawyer is adept at doing it. These efforts will help avoid 204(a) examination – a detailed examination of your financial conditions.
Saves your money
People who file for bankruptcy are already in a bad financial condition and it is not a surprise that they try to file for bankruptcy on their own. But it is not a good decision. Filing on your own may not fulfill the desired purpose as you don’t know the process. An expert lawyer will make it easy and smooth for you. So, hiring one is worth it. His services will help you get the best out of your situation.
Helps you get the most out of your situations
When you file for bankruptcy, you are required to attend bankruptcy meetings that are actually creditors' meetings. These meetings are presided over by the trustees assigned by the court. In these meetings, the creditors and their attorneys want to know about your financial situation. At times these questions could be tough and complicated. Here a bankruptcy lawyer on your side will help you sail through these situations. His guidance will help you safeguard your rights.
Keeps track of discharge and recovery
One of the prime responsibilities of bankruptcy lawyers is to keep track of discharge and recovery. He is the one to make sure that all discharges and follow-ups have been completed successfully. You may be intriguing what discharge is here. In simple words, discharge means you are freed from debt liabilities as the bankruptcy proceeding concludes. On the other hand, recovery is the process of finding the causes behind bankruptcy and what should you do to avoid such circumstances in the future.
Gives important advice
Besides other things, hiring a bankruptcy lawyer would ensure that you are never short of good advice. As he has performed the process several times and knows the rules and regulations his guidance and support will help you make valuable decisions.
How to find a good bankruptcy lawyer
Dealing with bankruptcy cases requires expertise, experience and hard work and not all lawyers are ideally suited for the job. You must go for a lawyer who can help you navigate through the process. Here is how to find an ideal bankruptcy lawyer.
Specialty should be the preference
Law is a diverse subject that encompasses various topics. And not every lawyer is experienced in bankruptcy law. The laws regarding bankruptcies are complex and you should give preference to a lawyer who is proficient in the finer nuances of the law.
If some of your acquaintances have filed for bankruptcy in the past then they can better guide you on bankruptcy lawyers.
Ask for referrals
Don’t shy away from doing your own research while hiring a bankruptcy lawyer. Ask your friends, acquaintances, or someone who has ever filed for bankruptcy. These people have better ideas about the quality of bankruptcy lawyers in the vicinity. Why make mistakes if there is someone to guide you?
There are some attorneys who offer free legal advice. Such attorneys may introduce you to a good bankruptcy lawyer.
You can also consult your local bar association which can help you with the numbers of some good bankruptcy lawyers.
Online research
You can also do online research if you want to know more and more bankruptcy lawyers. There are several online directories like google and yelp that gives you a listing of the best bankruptcy lawyers. To find them you just have to type bankruptcy lawyers near me and you will be served with various options.
Besides search engines, you can also search them on social media where bankruptcy lawyers have made their profiles.
You can also visit the website of the National Association of Consumer BankruptcyAttorneys (NACBA) where you can find the list of qualified bankruptcy lawyers have been given.
Good lawyers cost more
The term cheap and best is an oxymorons. Don’t buy it. Hiring a good lawyer cost more. You should not settle for an incompetent lawyer even if it comes to a pittance. We understand that you are going through a rough phase but any compromise here would further worsen your situation. So, our advice is to always go for the best and not ruin your prospect by going for a cheap bankruptcy lawyer who might prove incompetent.
No substitute for experience
Qualification is important but there is no substitute for experience. Always go for a bankruptcy lawyer who has spent several years in business. ask your lawyers for how many years he has been handling bankruptcy cases and with what success. Based on this discussion you should make up your mind.
Personal interview
Once you have shortlisted some attorneys it is time to conduct a personal interview. A personal interview lets you know more about your prospective lawyer and some questions. Here is what to ask your bankruptcy lawyers on your first meeting.
- Ask him about the costs
- Would I lose my assets?
- Pros and cons of filing a bankruptcy.
- How many bankruptcy cases he has handled?
- What information do they need from your side?
- Who will represent me in court?
- Would I be able to hold a credit card?
- How would it impact my credit score?
- What if my bankruptcy is not approved?
- Also, ask about their mode of communication and how fast they return your call.
- How experienced is he with the paperwork?
- Knowledge of local law
Besides having a good knowledge of bankruptcy laws, he should also have knowledge of the local law of the court. The procedures at one court differ from that of another and a lawyer who understands it finds himself at ease. Their knowledge of local law can tilt the scale in your favor to a small extent.
Does he give personal attention?
There are several lawyers and law firms handling bankruptcy cases. But most of them have an overload of work and they fail to provide personalized attention to your case. Always prefer an attorney or a law firm that offers personalized attention to your case.
Your comfort level
While working with a bankruptcy lawyer, you should also check your comfort level with him. There are times when you are not comfortable working with a particular lawyer. So, if there are some comfort issues between you and the lawyer it is better to look for some other bankruptcy lawyer.
Ratings and reviews
Ratings and reviews are the most common ways to know about service and your bankruptcy lawyer is no exception. There are several portals where you can find candid reviews of lawyers. If they have a social media handle that should also be checked. You should know your prospective lawyer well before hiring him.
Frequently asked questions
What Information a bankruptcy lawyer will need on the first consultation?
When you are visiting a bankruptcy lawyer for the first time, you should have certain documents ready. The list is as follows.
- The list of creditors
- Document for the amount to be paid
- Complete list of assets
- Your monthly expenses
Can I file for bankruptcy without a lawyer?
Yes, you can by following recommended procedures.
What are the positive and negative sides of hiring a bankruptcy lawyer?
There are positive and negative sides to filing bankruptcy on your own without a lawyer.
Not paying any fee is among the major pros.
When
it comes to cons, there are a few. As you are not aware of the process, you
might make mistakes filling out several forms. Any mistake at this stage may
bring losses. As you have not attended creditors' meetings before, not having a
bankruptcy lawyer on your side might affect your preparations for the meeting.
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