To begin with, a bankruptcy attorney can assist in deciding which type of bankruptcy to apply. Chapter 7 allows individuals to eradicate the majority of their debts if they pass a means test. Nearly two-thirds of all bankruptcy filings are of the Chapter 7 variety, making it the most prevalent variant. The remaining one-third of bankruptcies are Chapter 13, which allows debtors to repay a lesser portion of their debt over a period of typically three to five years.
Additionally, bankruptcy attorneys can help you navigate some of the more recent filing regulations. The Bankruptcy Abuse Prevention Act of 2005 and the Consumer Protection Act enacted in the same year were intended to prevent filers from abusing the system, but had the unintended consequence of making the process more difficult for many ordinary filers. According to a study conducted by the American Bankruptcy Institute, this law increased the expense of filing for bankruptcy by 40 percent. It also increased the amount of documentation, making it more difficult for many filers and discouraging many individuals who desperately needed the fresh start bankruptcy provides.
Because bankruptcy can place many of a person's assets at risk, a bankruptcy attorney can assist those who need assistance understanding their legal rights. Bankruptcy law firms assist in protecting petitioners throughout the process and determining which debts are dischargeable and which assets may be retained. These include jewelry, vehicles, and a certain amount of property equity. A person's home is not always secure from seizure as part of the process; therefore, an attorney can determine the optimal filing method and loan status to prevent this, if possible.
Additionally, bankruptcy attorneys can be a source of stability during the challenging procedure. They are familiar with the state's laws and can ensure that all documents and debt schedules are complete and error-free prior to filing. Due to the fact that a single error can imperil the entire proceeding, filing without an attorney is a risk that most people cannot take. The finest attorneys are those who specialize in bankruptcy law, as opposed to those who practice it as an afterthought. These specialized attorneys comprehend the process, having answered basic questions about it numerous times, and are frequently acquainted with the judges and other court personnel involved. They will file the petition with the court, function as a liaison with the appointed trustee, and attend the Meeting of Creditors with the petitioner.
Not only individuals can benefit from the services of a bankruptcy attorney. Additionally, bankruptcy law firms can guide business proprietors through the available bankruptcy options. A Chapter 11 bankruptcy, also known as a business reorganization, enables a company to repay a more manageable portion of its debt, which creditors appreciate because it means they will receive a greater payment than if the company were liquidated. This process can be advantageous, but the business owner must first develop a detailed debt repayment plan with the assistance of a qualified bankruptcy attorney.""
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