Bankruptcy is a legal status for which any American or business can file when they are in the worst financial state possible. People and enterprises can opt to file bankruptcy if they cannot repay their debts. The constitution allows two types of bankruptcy: Chapter 7 and 13 bankruptcy. Chapter 7 allows debtors to liquidate your assets to cover your liability, while chapter 13 creates a structured repayment program. Qualifying companies can also use Chapter 7 bankruptcy to create a reorganization plan. Although the court does not require that you have legal representation when filing for bankruptcy, it is not a good idea to do it alone. Hiring a bankruptcy lawyer can affect the success of your case. Here are some ways in which a bankruptcy lawyer can help you.
Experience. Hiring legal representation is always a good move since the bankruptcy law is complicated. Bankruptcy proceeding requires the knowledge of both the state and federal laws. Additionally, bankruptcy requires detailed and accurate documentation of all your liabilities and assets. Since a bankruptcy attorney understands the paperwork requirements, he or she can smoothen the process. Additionally, a seemingly simple mistake on your side can compromise your rights. As such, ensuring that your paperwork is correct is a primary benefit of having a bankruptcy attorney.
Representation. Bankruptcy requires continued communication with your debtors for negotiations, settlements, and specifics of the court proceedings. You may feel uncomfortable to hold these talks or feel unsure of the information they give you. In addition to representing you in court proceedings, a bankruptcy lawyer can handle any communication with your debtors. Moreover, while an individual can file for bankruptcy without legal representation, the federal judiciary requires that partnerships and companies must have a lawyer to file for bankruptcy.
Insurance. Lawyers carry malpractice insurance. If he or she makes a mistake during your bankruptcy proceeding, you are entitled to compensation if he or she loses the case. However, no one can compensate you if you filed the lawsuit on yourself. Having a bankruptcy lawyer comes with an added level of security.
Professional Courtesy. Unlike you, attorneys have connections with clerks, judges, and other parties related to your case. A lawyer also understands the court system and how to handle your situation. Even though the lawyer does not hold any legal advantage over prose fillers, the professional connections can help in keeping the case moving through the system.
Harassment. One problem that you will face from creditors is constant phone calls. Additionally, the more you owe or get behind in payment, the more persistent creditors will become in their collection efforts. However, when they learn that you have legal representation, they are less inclined to harass you for payment. In case of any phone call, you can always refer them to your attorney. Your attorney will also have the means to handle creditors who violate the automatic stay that goes into effect immediately you file for bankruptcy.
Filing for bankruptcy is a complicated process. As such, residents of Philadelphia should contact bankruptcy lawyers in Philadelphia pa for help.
This is a collaborative post.
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