The most important myth that your bankruptcy lawyer will dispel in your first meeting is that bankruptcy is not the end of your life. Rather, it is a chance at a brand new life if you are in financial distress. If you’re considering filing for bankruptcy, a qualified bankruptcy lawyer will help you evaluate your situation, your options, and your best course of action before you file. In some cases, he or she can help you avoid bankruptcy altogether if you work with your lawyer and your creditors sooner rather than later. If you and your lawyer determine that bankruptcy is necessary, your lawyer will file all the necessary court petitions and papers on your behalf.

The most important myth that your bankruptcy lawyer will dispel in your first meeting is that bankruptcy is not the end of your life. Rather, it is a chance at a brand new life if you are in financial distress. If you’re considering filing for bankruptcy, a qualified bankruptcy lawyer will help you evaluate your situation, your options, and your best course of action before you file. In some cases, he or she can help you avoid bankruptcy altogether if you work with your lawyer and your creditors sooner rather than later. If you and your lawyer determine that bankruptcy is necessary, your lawyer will file all the necessary court petitions and papers on your behalf.

Is bankruptcy for me?

Bankruptcies hit another new all-time high last year, and the upward trend continues. Many people who file for bankruptcy seek relief from debt due to loss of their job. Others cannot afford skyrocketing medical expenses. Business failure, divorce, and easy credit leading to too much debt are forcing more and more people into bankruptcy. In fact, more than 1.6 million families filed for bankruptcy last year.

The continuing stranglehold of escalating debt takes a toll, both mentally and physically. If you are unable to see any light at the end of the tunnel, your bankruptcy lawyer will help you reach the best solution. Bankruptcy can discharge debts, wipe the slate clean, and offer you a fresh financial start. When you file for bankruptcy, the court grants an automatic stay, which immediately stops harassing calls and all other collection actions from creditors. The stay remains in effect for the duration of your bankruptcy case.

Bankruptcy relieves you from debts incurred prior to filing, not future debt. When the court discharges a debt, the creditor can never bring legal action for that debt again. Bankruptcy cannot discharge certain debts; for example, child support, student loans, alimony, criminal restitution, and certain taxes. Your bankruptcy lawyer will explain all of the exemptions that apply to your case.

How does the bankruptcy process work?

Bankruptcy relief is sought through the United States Bankruptcy Court. The myriad of technicalities and the various types of available relief require that you use a bankruptcy lawyer in order to secure the best possible relief for your situation. Bankruptcy lawyers charge a fee for their services, but a qualified bankruptcy lawyer’s expertise is essential in securing the most favorable terms from the court. Many of your personal assets are exempt; they are protected from seizure, and they are yours to keep. You will probably retain your home, your automobile, tools of your trade, and many of your personal effects.

In general, there are two types of personal bankruptcies: Chapter 7 and Chapter 13. Chapter 7, liquidation bankruptcy, petitions the court to dispel debts, while Chapter 13, reorganization bankruptcy, petitions the court for protection while you repay your creditors.

In Chapter 7 proceedings, the court appoints a trustee to take possession of your non-exempt assets, to arrange for their liquidation or sale, and to divide the proceeds among your creditors.

Chapter 13 bankruptcies usually require a regular income. Your bankruptcy lawyer will file a reorganization plan detailing how you intend to repay your creditors. You will pay some creditors less than you owe and you’ll repay in installments over an extended period. The court must approve the terms of your repayment plan.

If the stress from your debts is overwhelming, and there is no possible way for you to pay those debts, seek advice from a qualified bankruptcy lawyer as soon as possible.