When Do I Need a Bankruptcy Attorney?

It’s not a situation for congratulations when you start thinking about filing for bankruptcy. Still, you can maximize the positive effect of it if you do it right. Should you file yourself? Or does it make sense to contact an attorney? With Debtstoppers, let’s make it clear.

When an Attorney Is Necessary

First of all, let’s see whether an attorney is that necessary. In short, there are two types of necessity when it comes to a bankruptcy lawyer.

  • When it’s a legal requirement. For example, if you file for bankruptcy for your business, you should hire an attorney. You cannot represent it as a person: the bankruptcy code says it explicitly.
  • When things get too sophisticated. According to the federal law, you can handle it yourself, but there can be complications. For example, if you have too many unpayable debts, or you have recently transferred assets out of your name, or you own quite a bulk of property you will probably lose, or you have been involved in a sort of fraud, you need a professional to minimize your losses from this.

It’s mostly the latter situation that we’re interested in (when you file as a person). It may seem a good idea to save your money and improve your legal skills by filing yourself. But this type of education may cost you.

What an Attorney Helps With

When you consult an attorney first, it can lead to unexpected results. The first question is: do you need to file at all? Maybe there are other ways to restructure your debts, negotiate with your creditors, and develop a plan to make your regular payments easier. It requires professional knowledge and soft skills that an attorney probably has.

If you represent your business that faces dire straits, there is one question: to close or not to close? If you decide to fight a little more, you need a Chapter 11 specialist who will help you to reorganize your business and keep it afloat. But if you decide that it’s time to turn the page, you need a Chapter 7 lawyer who will make sure you get the best result from closing or transferring your business.

Other questions that an attorney answers better may include the following:

  • How to save as much of your property as possible? How can you benefit from your state exemption laws? How to use a wildcard better?
  • How can you handle the situation if you got involved in some fraud or illegal activity before bankruptcy?
  • What if there is evidence you have been buying luxury items not long before filing?
  • How will your bankruptcy affect your family and how to minimize this impact?
  • What if your creditors want (and have their reasons to) challenge the discharge you’re aiming for?
  • How can you stop calls and emails from creditors until your problem is solved?

Navigating through these circumstances requires (as we have said) both legal knowledge and experience and soft skills. Armed with these, an attorney can save you much more money and effort than you spend on hiring a good professional.

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