A bankruptcy attorney serves as your advocate and specializes in helping you through the confusing process of filing for bankruptcy and other legal issues.
To find a local bankruptcy attorney, you can consult your friends or relatives for trustworthy attorneys. If you can’t swallow your pride, you can find attorneys in your area on websites like the American Bar Association (ABA) and Legal Services Corporation.
To match with a bankruptcy attorney, you will need to present your case depending on your legal issue. This article explains what type of case you could fall under.
The most common financial bankruptcy issues include collections, consumer bankruptcy, consumer credit, contested wills or probate and income tax.
Read on to learn about what each case means, how long it will take to settle and what documents you will need to present to your lawyer.
Creditors go through a process called debt collections to get money from uncooperative debtors. This is a legal process that a debt collection agency has to abide by to collect your due payment.
In case the debt collection agency violates your rights under the Fair Debt Collection Practices Act by way of harassment in the form of abuse, threats, false information, wrong representation or repeated contact, you have every right to sue the agency in a state court.
You could handle the matter yourself as in small claims courts. The process is faster but the compensation for damages is usually limited. Hiring an attorney to represent you is a better option. If you suffered damages such as lost wages or medical bills, you can collect damages as much as $500,000 through the lawsuit.
You will have to present all the records you have of harassment to your attorney. The records of evidence to a judge or jury could include a log of phone calls received, text and voice messages, and letters with persuasive messages. You could prove a pattern of communication of harassment.
Consumer debt is when you’ve accumulated debt on personal expenses. When you file for this type of personal bankruptcy, your goal is to reduce consumer debt.
There are 2 types of consumer bankruptcy (bankruptcy code) — Chapter 7 and Chapter 13.
Chapter 7 bankruptcy refers to “straight” bankruptcies, wherein your debts are liquidated under bankruptcy law. Most of your property is sold and used to pay off your debts. It typically takes 3-5 months to get a discharge. Although you’ll lose your assets, you will be able to quickly discharge most debts and get a fresh start.
Chapter 13 bankruptcy is when you set up a repayment plan to resolve your debt. This type of bankruptcy is meant for people who have stable income or the ability to pay back all or some portion of their debts. Unlike Chapter 7 bankruptcy, your property will not be sold as long you successfully complete the court-mandated repayment plan (usually 3-5 years).
To file for Chapter 7 bankruptcy, there is a series of documents you will have to present that includes a list of your assets. For Chapter 13 bankruptcy, you will need to prepare a repayment plan, which will have to be approved by a court-appointed trustee.
Consumer credit is a personal debt taken by you without collateral to purchased items. A typical example is your credit card.
If you misuse your credit card, you can ruin your credit score. Your credit score is a metric used by lenders to determine your creditworthiness. If you have a bad credit score, you may not be qualified for loans to buy a home or car in the future. Even if you do get qualified, you might be charged with heavy interest.
When you have consumer credit debt, your creditors might take certain steps to get their money back that may not be legal. For this reason, it might be difficult to tackle consumer credit issues on your own.
A finance attorney can help you know what protections you may have from creditors under state and federal laws. They can also negotiate with your creditors and possibly file for bankruptcy or even help you pen down a plan to repay your debts optimally.
Contested Wills or Probate
A will is a legal document that a person creates to declare how they want their property distributed and to whom after they are deceased.
Probate is a legal process that establishes the legal validity of a will so that the assets are rightly distributed and to the correct beneficiaries. It also establishes a plan for paying off any taxes or debts owed by the deceased.
If you have an issue with the contents of the will, you can contest it — provided you and the reason for contesting the will meet the proper legal standards to be heard in court.
The process of contesting a will is challenging. Although you can file a claim without the help of an attorney, it is recommended that you keep one because of the complicated probate laws and nature of the case.
Income tax is a percentage of your paycheck that is given to the government. The percentage varies depending on factors like your total earnings, source of earnings, etc. The Internal Revenue Service (IRS) collects your taxes.
Tax evasion schemes are often used to avoid paying taxes. This can be done in multiple ways but the IRS often becomes aware of a potential tax evasion scheme after performing a civil audit. If the government finds out that you aren’t paying your taxes, they will demand money and can even put you in jail.
Tax laws are difficult to understand and change every year. If you haven’t paid your taxes for several years, an attorney can help you overcome your income tax problem.
An income tax attorney can protect your rights and assist you by negotiating with the IRS. They employ tax evasion defense methods to reduce charges, lessen penalties and even dismiss your case.
Do You Need a Bankruptcy Attorney?
It is possible to tackle legal matters on your own but having an attorney is the safest route if you want to succeed.
A good bankruptcy attorney should provide you with an initial consultation to get an overview of your case. They will then offer advice on your available options and what type of bankruptcy to file and will complete the necessary paperwork. When you go to court they will represent you and defend your case.
Frequently Asked Questions
Q: What are the main differences between Chapter 7 and Chapter 13 bankruptcy?
A: Chapter 7 bankruptcy is what most people probably think of when considering filing for bankruptcy. You will likely lose property and the negative mark on your credit report will remain for 10 years. But, the amount will be discharged and there’s no repayment required. If you get into debt again, you won’t be able to file for bankruptcy again under this chapter for 8 years.
Chapter 13 bankruptcy works if you are able to repay some or all of your debt. Since you can retain some assets, it is considered a more favorable option when compared to Chapter 7 bankruptcy. Another reason why it’s favorable is that Chapter 13 bankruptcy will fall off your credit report after 7 years and could file under this chapter within 2 years.
Q: Does bankruptcy fall off after 7 years?
A: Bankruptcy falls off your credit report depending on the chapter you filed. Chapter 7 bankruptcy is deleted after 7-10 years while Chapter 13 bankruptcy is deleted within 7 years since you will be required to make at least a partial payment.
Q: What should I do if a creditor demands payment of a debt after I file my case?
A: Debt collectors are not allowed to collect on debts that were discharged in bankruptcy. Even if the bankruptcy is pending in court, collectors cannot continue collection activities.
You must let the debt collector know that you are represented by an attorney so that the debt collector can contact your attorney instead of you.