What is a bankruptcy attorney?
Simply put, a bankruptcy attorney is a lawyer who specializes in bankruptcy law. Individuals and corporations routinely seek out a bankruptcy attorney at the start typically secured if the filings go according to plan, so that you don't end up paying out of pocket at the onset, only to have the filing mismanaged.
What does a bankruptcy lawyer handle?
In most cases, your bankruptcy attorney will, in collaboration with the courts and any appointed trustees, manage your case from start to finish. This is especially important because the bankruptcy process is typically very involved and complicated, and without legal counsel you risk the chance of ending up in a worse financial situation.
Depending on your particular type of bankruptcy filing, your attorney should advise you in several key areas. Let's explore those:
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In Chapter 7, non-exempt property is turned over to the courts by way of a trustee to be liquidated, in order to secure funds for paying back creditors. However, since bankruptcy laws vary from state to state, it may not be clear what qualifies for exempt property (and more importantly, what does not!). A bankruptcy attorney will help you hold on to as much property as possible - i.e. your home, car, clothing, etc. so that you don't face the prospect of having to completely start over once the bankruptcy filing is discharged.
With Chapter 13, you don't liquidate your assets - rather, you negotiate a plan with your creditors to repay the debts you owe over a period of years. Chapter 13 allows you to retain all your property throughout the bankruptcy proceedings, ensuring that post-bankruptcy you have a solid foundation of assets still in place. However, as you might expect, bankruptcy negotiations are complicated, steeped in legal jargon, and not something we advise anyone handling on their own. This is exactly why we recommend hiring a qualified bankruptcy attorney. He or she will act as the conduit between you and all interested parties, drawing up the papers, ensuring everyone is on the same page and, hopefully, keeping the process running smoothly from start to finish.
Corporations who file for Chapter 11 (as many financial institutions did in the recent recession) usually have a team of bankruptcy lawyers working on their behalf to restructure the company's debt and ensure the business stays open while bankruptcy proceedings continue.
The bottom line: In virtually all cases of bankruptcy, qualified bankruptcy attorneys play a critical role. They provide information on bankruptcy that may not be readily available or apparent, but is nonetheless important to understand. And they help you to thoroughly understand bankruptcy law so that you can make the system work in your favor. Just be cautious about who you choose to hire - sadly, there are many lawyers who may promise you a clean slate with zero penalties - and unfortunately, it may not work that way in your situation. Choose your lawyers wisely, and you'll find the process of filing for bankruptcy doesn't have to be as painful as you may have once thought. Get strong recommendations and review lawyer record of service and history.
For a review of debt relief alternatives to bankruptcy in California and to get a free debt relief analysis along with a savings estimate, simply answer a few questions online.