Bankruptcy and debt relief issues can be confusing when in financial distress. Yet, this is the time you require legal protection to maintain a sense of normalcy even as you try to seek solutions to regain your financial status. Filing for bankruptcy is legal protection you can use, but you need to do it right to get the maximum benefits. A good bankruptcy attorney can make all the difference in bankruptcy proceedings. But, how do they ensure your interests are protected?
1. Filing Under the Correct Chapter
You must first decide which chapter you want to file. The process of choosing a chapter depends upon the assets available to satisfy creditors' claims and the magnitude of debts. If no assets exist apart from personal property, you must file under Chapter 7. However, if such assets exist, Chapter 13 may be more appropriate.
A bankruptcy lawyer will explain the consequences of filing under each chapter. For instance, Chapter 13 bankruptcies tend to carry more extended repayment periods than Chapter 7, while Chapter 7 bankruptcies usually provide higher discharge amounts for most unsecured debt compared to Chapter 13.
2. Obtaining Advantageous Debt Restructuring:
Your bankruptcy attorney can negotiate favorable terms with your creditors to help you recover financially faster, even as you pay off your debts. These negotiations typically involve reducing interest rates and extending payment schedules.
Your lawyer can also negotiate a plan where you repay only part of your unsecured debts and settle some of your secured ones. This strategy is often advantageous because you avoid the stigma of declaring bankruptcy.
3. Disputing Asset Valuations
You should always challenge valuations put forward by a creditor before signing off on a settlement offer. Your bankruptcy lawyer can argue that a certain asset has greater worth. For example, you can raise a dispute if you find out that your home doesn't have enough equity to support a settlement offer, which could lead to increased payments over the long term.
Another argument would be to insist that other assets should be considered separately instead of being lumped together, which helps avoid losing valuable assets.
4. Protection Against Creditor Harassment
A bankruptcy attorney can prevent creditors from harassing you during the bankruptcy process. They can prepare documents that prohibit creditors from contacting you regarding the case, which can be very helpful if you have a series of creditors pressuring you to pay.
Are you considering seeking protection under bankruptcy? Book an appointment with a bankruptcy attorney to discuss your options.
For more information, contact a bankruptcy attorney near you.