It can be a scary feeling when a person comes to the realization that they are in over their heads in debt. Fortunately, the government has provided a means of protection for consumers who may otherwise have no way out of the financial hole they’re in. Filing a petition for bankruptcy is a common tactic that many people have used to get back on track with their finances. Although hiring an attorney for help isn’t required in order to file, there are specific reasons that it’s better to work with legal counsel throughout the bankruptcy process.
Qualifying For Chapter 7 Bankruptcy
While the federal government does seek to help financially overwhelmed consumers, they also want to ensure that they do everything they can to prevent bankruptcy fraud. A bankruptcy attorney can walk consumers through the Chapter 7 qualification process, ensuring that they meet the income requirements in order to be eligible. This helps them avoid wasting time or money.
Figuring Out How To Keep Assets
The nature of Chapter 7 bankruptcy is such that unsecured debts are wiped out. However, this also means that the consumer may have to sell or give up their major unsecured assets (such as a home or car) to pay back their creditors. The good news is that this isn’t a hard and fast rule that is applied in every case. It is possible for some people to file for Chapter 7 bankruptcy and protect the equity in their home, and an attorney can help them understand how to do that.
Understanding The Possible Consequences
While Chapter 7 bankruptcy can lead to financial freedom, Forbes Magazine explains that it is not without its consequences. It is possible for a creditor to challenge the petition in an adversary proceeding and a judge to declare a debt non-dischargeable. Bankruptcy filings can also have significant tax consequences for the consumer. A good attorney will review a consumer’s case and inform them of any possible issues they may face and assist them in mitigating those issues or advise them against the bankruptcy if need be.
Getting Help With Case Management
Managing a Chapter 7 bankruptcy case is complicated, but having an attorney on their side means that a consumer won’t have to worry about it. As Bankrate’s Justin Harelik explains here, the attorney will take on the task of fielding calls from creditors, responding to court communications, and keeping the consumer on track with credit counseling course requirements. With the help of an attorney, all that the consumer has to be concerned about is providing accurate information and showing up for scheduled hearings and appointments.
Avoiding Unnecessary Paperwork Mistakes
It is important for all consumers to remember that Chapter 7 bankruptcy is a legal process. This means that they must stay abreast of and in compliance with all rules and laws. Paperwork must be filled out thoroughly and accurately. This things can be tough to accomplish without the help of an attorney. Legal counsel will help consumers make sure that they are listing assets and reporting income and expenses correctly.
While hiring an attorney to assist in the bankruptcy process is not a legal mandate, it can save a person time, money, and frustration. With a reputable attorney on their side, consumers will have a much better chance of actually getting the outcome they want so that they can finally put their debt woes behind them.