Individuals can initiate bankruptcy proceedings when they can not meet their financial obligations. There are different types of bankruptcy provisions under the ambit of the federal law. Consumer bankruptcy is filed in cases where individuals can not pay back their loans that they incurred to meet their personal needs.
After the legal proceeding is successfully over, an individual no longer remains liable for the debts they incurred. But, at the same time, the record of bankruptcy looms over the individual’s credit report for ten years. Since bankruptcy filing has long-lasting consequences, it is always recommended as the last option to go for. However, if someone has no other option than to file for bankruptcy, it is always recommended to review the available choices well before zeroing in on one.
This article covers the following topics:
What Does Chapter 7 Bankruptcy Entail?
Chapter 7 bankruptcy is called liquidation bankruptcy as well. The provisions of this chapter allow an individual to discharge all his legally dischargeable debts. However, not everyone would qualify. To leverage chapter 7 bankruptcy filing provisions, the income of the individual should be equal or less than the median income in the state they reside in. Once an individual qualifies to file for bankruptcy under Chapter 7, the court appoints a trustee to oversee if selling the property of the petitioner would generate enough money to pay off the creditors. The court also arranges for a creditors meeting where the petitioner needs to be present for the bankruptcy order to remain valid.
What Does Chapter 13 Bankruptcy Entail?
Chapter 13 bankruptcy is called wage earner’s bankruptcy. The provisions of this chapter allow individuals to restructure their debt. Those who have higher incomes and are willing to retain their property follow the provisions of this chapter. However, there are several conditions that one needs to fulfill to qualify for a chapter 13 bankruptcy filing.
- The petitioner should be an individual or a married couple who have an unincorporated business or are self-employed.
- The quantum of secured and unsecured debt should be equal or less than $1,184,200 and $394,725 respectively.
- History of dismissed bankruptcy petition within the last six months would act against qualifying under Chapter 13 provisions.
Becoming eligible for bankruptcy approval is a complex process involving different provisions, qualifying criteria, etc. Even the requirements may change depending on the merits of the case or depending on the specifics of the state law. Therefore, it is always prudent to hire or consult with a consumer bankruptcy attorney before moving forward with a petition.
If one follows some well-tested ground rules, the chances are high that he or she would end up finding the perfect consumer bankruptcy lawyer for taking the petition forward. We have listed these factors that one should consider while hiring or consulting an attorney.
The Working Knowledge of the Attorney
Experiential knowledge of dealing with bankruptcy cases does not only come with years of experience as an attorney in general. It comes with the pertinent experience of dealing with consumer and small business bankruptcy laws. Therefore, look for attorneys who have knowledge about the specificities rather than how long the lawyer’s legal practice has been.
Since years of experience is not the only determinant, there are ways you can find out a good consumer bankruptcy attorney.
It’s always better to take reference from someone who has gone through the process and has leveraged the service of a bankruptcy attorney. One may also consult friends or family who may personally know such attorneys.
Bar Association Referrals
State-wise bar associations maintain the database of lawyers according to their areas of specialization. They also run institutionalized referral services where one can call and get to know about specialist lawyers.
Many web portals run lawyer directories that are freely accessible on the internet. Many of such listing services also provide ratings and feedback on the performance of such attorneys. One can access these websites to identify lawyers who have wide experience of dealing with consumer bankruptcy proceedings.
Practicing law successfully is mostly about keeping oneself updated. It is, therefore, important for a lawyer to keep on attending courses, seminars, and educational events regularly. With new amendments and new bills passed, laws keep on evolving. The lawyer must keep track of these changes almost on a runtime basis. It is also crucial that the lawyer is well aware of past consumer bankruptcy proceedings in the court. It’s even better for the attorney to know how the legal authorities react to the filings, the factors that they consider, and the angles they look for while dealing with bankruptcy cases under their jurisdiction.
The most competent way to judge whether an attorney has these skills that you are looking for is to look at their association affiliations. Being members of reputed legal bodies and area-specific lawyers’ networks help one to keep updated about the current events, cases, and amendments in the law.
Legal Aids and Legal Clinics
One of the ways to identify consumer bankruptcy attorneys that would fit your budget is to contact the local legal aid offices. It is particularly important for chapter 7 petitioners since they severely suffer from the lack of income when they file these petitions. Many law schools run legal clinics as well. These clinics not only help with consultations but also provide legal aid services for low-income and middle-income people who are in distress.
Human Qualities of the Lawyer
Apart from having professional expertise and skillset, an attorney should also be compassionate about his client’s situation. Look for attorneys who hear you out with attention and are capable of working out a specific plan matching your exact needs. Some attorneys try to shape each proceeding with the same mold. They don’t feel comfortable going out of a set pattern as they believe that would take require them to invest more time per case. You should be mindful about such approaches and only opt for attorneys who would deal with each client as a distinct and separate case altogether.
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