Posted on: 19 January 2022
Being in debt can seem like a hopeless situation that you cannot overcome on your own, as it tends to continually worsen over time. Compounded interest coupled with additional borrowing not only increases the amount of money that you owe, but you may even start to feel that all assets under your name will be inadequate to clear this insurmountable amount of arrears. Hence, you keep borrowing more money simply to stay afloat. But rather than risk getting sued by multiple lenders, you may want to take a step in the right direction by hiring a bankruptcy attorney.
A misconception some people have about bankruptcy lawyers is that they are only relevant when you are in dire need of representation in court but this is not the case. Filing for bankruptcy may prove to be the only long-term solution to addressing the insurmountable debt that you have accumulated. So what should you discuss with a bankruptcy attorney during your initial meeting?
Are all types of bankruptcy the same?
The first thing you need to discuss with a bankruptcy lawyer is the different options available to you when filing for bankruptcy, as they do not offer the same degree of protection. If you currently are not making sufficient, or any, disposable income to repay the debts you have accrued, your attorney could advise you to file for Chapter 7 bankruptcy. With this option, the court can free you from paying off dischargeable debt, for example, if you have credit card arrears, which allows you to have a fresh start financially. However, not everyone qualifies for Chapter 7 bankruptcy. Hence, the bankruptcy attorney would have to determine if you are eligible for this option by having you take a means test.
The second option available to you is Chapter 13 bankruptcy, which entails having the court come up with a stringent payment plan for you to repay all your consolidated debts. Both these options have benefits and drawbacks, so it is crucial to retain a bankruptcy attorney, as they can advise you on which solution works best for your circumstances.
When will the bankruptcy take effect?
A misconception you may have about filing for bankruptcy is that you can do it at any time you want since court proceedings are long and drawn out, but this is inadvisable. As long as you are under pressure from creditors, it is in your best interests to start the process as soon as possible with the bankruptcy attorney. The sooner you can retain the services of a bankruptcy lawyer, the sooner they can submit a bankruptcy petition and get a court injunction, which will go a long way in protecting you from foreclosure and the sale of other assets that could be excluded from the bankruptcy process.
Contact a company like Southern California Law Advocates to learn more about bankruptcy.Share