Bankruptcy is a complex process with three main stages. The stages of bankruptcy include planning, preparation, and the actual bankruptcy case. How you conduct your affairs during each phase determines the outcome of your bankruptcy.
Thus, at each stage of bankruptcy, it is advisable to have a bankruptcy lawyer by your side guiding you through the process. Unfortunately, most people hire bankruptcy lawyers when they have to go to court for their bankruptcy hearing. However, a bankruptcy lawyer is essential at every stage of bankruptcy.
Thus, here are the various services a bankruptcy lawyer can provide before filing for bankruptcy.
Planning for bankruptcy typically involves determining whether filing for bankruptcy is the best option for you; and, if so, which is the most suitable bankruptcy chapter for your situation. Before deciding on either, it is advisable to have a bankruptcy lawyer help you weigh your options.
1. Other Options
Sometimes bankruptcy is not always the best option for your financial troubles. By weighing in on your financial situation, a bankruptcy lawyer can help you decide whether filing for bankruptcy or choosing an alternative solution is the best policy. For instance, your lawyer may recommend alternative solutions such as negotiating with your creditors to formulate a more flexible payment plan instead of filing for bankruptcy.
2. Deciding on a Bankruptcy Chapter
If bankruptcy is your only solution, a bankruptcy lawyer will help you determine whether to file for Chapter 7 or Chapter 13. Additionally, your bankruptcy lawyer will walk you through each bankruptcy chapter so that you understand the consequences of each chapter for your situation. Thus, a bankruptcy lawyer will help you choose a bankruptcy chapter that is favorable for your situation.
Preparing For Bankruptcy
Once you and your bankruptcy lawyer have decided on which bankruptcy chapter to file for, it is time to prepare for the filling. Preparing for bankruptcy involves the following steps.
1) Taking a Means Test
The means test is an evaluation to determine whether you qualify for Chapter 7 or Chapter 13 bankruptcy. It is up to your lawyer to use any exceptional circumstances in your case to help you qualify for the bankruptcy chapter you want to file.
2) Calculating the Value of Your Property
Valuing your property can be a challenge, especially if it is your first time. Additionally, valuing your property too high or too low can have adverse effects on your bankruptcy case. Thus, it is up to your bankruptcy lawyer to ensure you disclose all your property and have it appropriately valued.
3) Applying for Exemptions
Various bankruptcy exemption laws help individuals keep some of their property out of bankruptcy in every state. For instance, you may want to retain your home after a bankruptcy. A bankruptcy lawyer will help you choose and apply for such exemptions so that you get to keep some of your property.
4) Debt Discharges
Despite the need to pay your debts, it is possible to have a portion of your debt discharged or eliminated under certain conditions. It is the work of a bankruptcy lawyer to determine if you qualify for debt discharge and explain to you which debts can be discharged and which ones you have to pay.