Is it a Good Idea to File Bankruptcy Without a Lawyer
Many people are still reeling from the economic downturn and are wondering whether to file bankruptcy, and whether to file bankruptcy without a lawyer, seeing this as yet more expense.
It’s true that lawyers are not cheap. However, bankruptcy is one of the single most important steps one can take, and with the complications and pitfalls, declaring yourself bankrupt without the support and guidance of a lawyer is unthinkable.
There are various options open to you when declaring yourself bankrupt – the main options being what chapter to file under.
Chapter 7 is often the preferred choice as, despite having all your assets sold, you are left debt free (some debt cannot be written off) as opposed to chapter 13 bankruptcy, which is essentially a repayment plan over three to five years.
Before determining what chapter one should file bankruptcy under, the BAPCPA bought in a compulsory means test in 2005, intended to weed out those who could afford to repay in full, and force them into a chapter 13 filing.
This is one major reason not to file bankruptcy without a lawyer as the means test is complicated, and the result is far reaching.
You need to find a mid-sized law firm so that you always deal direct with your lawyer, not a paralegal, common in large firms. This is because your relationship with your lawyer is of the utmost importance, and there should be a free flow of questions and answers between the two of you.
Some lawyers tailor their rate to the amount you owe, others will charge a flat fee, which is the best way to go. A lawyer cannot be a creditor in a chapter 7 case, so the amount must be paid up front, as opposed to a chapter 13 case, where it can be included in your repayment plan.
Just after filing bankruptcy there is a “Meeting of creditors” – another area where a lawyer is very important.
You will need to provide the meeting with documented statements regarding amounts owed and to whom, as well as your own financial details.
The purpose of the Meeting of Creditors is to examine your financial details and determine what chapter of bankruptcy you should file under – a lawyers help is invaluable for this.
There are other more obscure aspects a lawyer will advise on. For example, your petition can be thrown out if you are found to have used a credit card after filing bankruptcy on the basis that you cannot repay.
Bankruptcy is complex, and a lawyer is a vital investment.
This is just one aspect of declaring yourself bankrupt. If you would like further free inIf you would likemation on various aspects of bankruptcy, look at www.decalringyourselfbankrupt.org.
categories: bankruptcy,insolvency,finance,personal finances,money,finance,wealth,debt,finance
