One of the most challenging financial situations to deal with is insolvency. Many people spend time in denial about their financial state, while others choose to file for bankruptcy alone. The problem with handling the process independently when you haven't done it before is that you might not fully understand bankruptcy law, which will complicate the process for you.
While there is no legal requirement to have a lawyer when filing, there are many benefits. Bankruptcy attorneys understand the federal law, which governs the process. Here are three other reasons to hire an attorney when filing for bankruptcy.
They Will Help You Weigh Your Options
You have two options once you realize that you have become insolvent. You can file for chapter 7 or chapter 13. Most people rush to file chapter 7 when they have pressing issues such as unsettled bills, foreclosure warnings, and creditors chasing them. Making a hasty decision might complicate your financial situation. A competent attorney will assess your debt and liabilities and help you determine which of the two choices will help you get the best financial start.
They Help You Protect Your Property
The biggest worry people have when they file for bankruptcy is losing personal property such as a house, car, and other assets. Attorneys often see chapter 13 as a better alternative to chapter 7 because it allows you to keep all your property. Chapter 7, on the other hand, will enable lawyers to liquidate some of the non-exempt assets to pay off your creditors. The trustee converts the assets to cash and settles your debts.
An attorney will help you protect assets such as your home, cars, retirement payments, and social security payments. They can also arrange for some of the money produced from liquidation to pay down your mortgage, make car payments, and continue your contributions towards retirement savings. With their assistance, bankruptcy will not feel like you are losing everything.
They Help You Avoid Mistakes When Filing
Another benefit of hiring a bankruptcy lawyer is the paperwork. To file, you have to prepare a petition and support it with dozens of documents. Any conflicting information about your debts and assets will get your claim delayed or dismissed. A lawyer goes through all the documents to ascertain that the information is accurate, simplifying the process.
Hiring a bankruptcy attorney to guide you through the filing process offers many benefits. With their help, you will get an easy fresh start to your finances.