Getting into a financial bind can be stressful, and sometimes you will have to take extreme measures to regain financial stability. If you’re considering filing for bankruptcy, you likely have a lot of questions. A bankruptcy attorney can answer your questions and represent you throughout the process to ensure that you are placed in the best situation as possible. Here are three reasons it makes sense to hire a lawyer if you plan to file for bankruptcy.

A Guide to Bankruptcy Lawyers

1. Advise You on Which Type of Bankruptcy to File

The first thing a bankruptcy attorney will do is allow you to explain your specific circumstances and then offer advice. In some cases, your lawyer may be able to recommend actions that don’t lead to bankruptcy at all.

If filing is the best option, there are two types of bankruptcy – Chapter 7 and Chapter 13.

Chapter 7 involves liquidating all of your assets to pay off your debts. In this scenario, a trustee will be appointed to you by the courts. Your trustee will be responsible for selling your assets and appropriately distributing the proceeds. 

Chapter 13 allows you to keep some of your property and restructure the payment plans for your debts. In this scenario, you can pay back a portion of the debt you owe using a 3-5 year payment plan. At the end of the agreed-on payment terms, the rest of your debt will be discharged.

Chapter 13 is usually preferred by those looking to avoid foreclosure, pay back taxes, or catch up on missed payments. You must have regular income to qualify for Chapter 13 bankruptcy.

2. Prepare Your Bankruptcy Paperwork

To proceed with bankruptcy, you’ll first have to complete the means test. This test determines which type of bankruptcy you’re eligible for.

It takes a close look at your income and expenses to determine whether or not you have enough income to repay your debts. If it’s determined that you don’t have enough disposable income, you’ll qualify for Chapter 7 bankruptcy. 

Your attorney will then value your property and fill out and submit essential paperwork. The value of your property will be determined by the replacement cost, which is what your property would sell for at retail value, given its current age and condition.

3. Provide Representation Throughout Your Case

Your attorney will prepare you for everything that lies ahead, including what you can expect from the judge and creditors. This includes having a trustee appointed to your case and then meeting with the trustee and creditors. This happens typically about one month after filing your paperwork.

If you’re considering bankruptcy, consult the attorneys at Osborne, Tripp & Schmidt in Sparta, WI. They can offer sound advice based on your specific circumstances and will always keep your best interests at the forefront. Their team of lawyers is friendly and approachable. Visit their website to learn more or contact them at (608) 269-2400 today for an initial consultation.