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Reasons for Hiring a Bankruptcy Attorney

Money that you have earned is better off in your pocket. However, if you are experiencing financial woes, a qualified bankruptcy attorney can turn these woes into something positive. Although it has a negative connotation, filing for bankruptcy is actually very helpful to those who need it most. The intention of the filing of bankruptcy is actually to provide relief to those who are deep in debt.

What then are the different types of bankruptcy you can file?

Chapter 7 bankruptcy can also be called liquidation or straight bankruptcy and in this type a debtor’s properties are sold so that he can wipe out all of his debts. In this type of filing, creditors cannot legally contact you to make collections.
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Another type of filing is the chapter 13 bankruptcy filing which is a plan to repay all or part of your debts using new income. In this chapter debtors propose a repayment plan to make installment to creditors over three to five years. The payment you make is calculated by how much money you have available and how much your owe.
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When businesses file for chapter 11 or 12 bankruptcy, they are still allowed to continue their business operations without any harm. In Chapter 11 there is a proposed plan of reorganization to keep the business alive and pay creditors over time. Chapter 12 bankruptcy is a filing for farmers or commercial fisherman that allows them to repay their debts at the most advantageous time for them.

The two most difficult debts to eliminate are student loans and tax debt. This is difficult because you are required by court to prove undue hardship and this is done by showing that if you are forced to pay your student loans or tax debt, then you will be unable to maintain even the lowest standard of living. An example of undue hardship is if you become disabled.

There is a proper procedure for claiming bankruptcy. Filing a petition before a judge is the first step in the bankruptcy court proceeding. You need a bankruptcy attorney for his complicated process so that the best possible outcomes are ensured. Some people think that if you file for bankruptcy, it will destroy your credit score. But, an attorney will tell you that the bankruptcy will remain on your credit report for ten years but it will help you start rebuilding your credit immediately. You bankruptcy attorney can help you keep your house. Since these are federal regulations, cases are brought to federal and not state courts. Hiring a professional bankruptcy attorney can help you interpret laws in your state in order to protect your home and financial future.