People should ask a bankruptcy lawyer questions before they file bankruptcy if they want to avoid making mistakes. These mistakes can include filing for bankruptcy when there is no need. For instance, people who are judgment-proof don't have any assets such as large amounts of money, wages or property that creditors or collection agencies can go after.
In other words, collection agencies and creditors will have nothing to gain by suing them. Thus, according to USA Today, a lawyer may advise people to send creditors letters informing them that they have contacted an attorney and to stop contacting them since they can afford to repay the debt. This can eliminate the need to file bankruptcy. Also, a lawyer prevents people from making other mistakes like using their retirement money or acquiring a second mortgage to repay unsecured debt such as credit card bills.
A Lawyer Tells People Their Options
During a meeting with a lawyer, people often discuss their financial situations. An attorney will advise people on the different bankruptcy options. For instance, people who are overwhelmed with debt, but unable to repay can file chapter 7 bankruptcy. However, lawyers may advise people with regular income and facing foreclosure to file chapter 13. Under chapter 13 people can stay in their homes and repay their back payments over three to five months. According to Lincoln Law, a bankruptcy attorney provides people with a clear understanding of the benefits and negatives of filing bankruptcy and any options outside bankruptcy that people haven't considered.
A Lawyer Helps People Understand Bankruptcy Rules
People considering bankruptcy may think that all they have to do is file paperwork with the bankruptcy court in their state and have their debts discharged or make payments. However, that's not the case. A lawyer can take people through the step-by-step process of filing for bankruptcy. These steps include obtaining credit counseling 180 days before they file bankruptcy, providing documents such as tax returns and obtaining debt education courses after bankruptcy.
A Lawyer Can Keep Bankruptcy Cases from Being Dismissed
The decisions people make prior to filing bankruptcy can cause cases to be dismissed by bankruptcy trustees. For instance, people may transfer assets such as money into their family member's name to hide it. Or people may not disclose that they are expecting money such as an inheritance. These decisions can make bankruptcy cases difficult to confirm. Thus, talking with a lawyer can prevent these poor decisions.
