It would seem with all the continuing gloomy economic news out there, bankruptcy shouldn’t shock anyone. It doesn’t seem to be just for big businesses anymore, and with new federal bankruptcy laws in place, debtors have more protection in the United States than ever before. Is it really necessary to engage the services of a Dallas bankruptcy attorney to resolve outstanding debts?
It may not be necessary to declare true bankruptcy in order to resolve outstanding debts, and here alone a bankruptcy attorney can be invaluable. He or she can review the case and discuss options with the client, such as a structured repayment program. If declaring true bankruptcy looks like the client’s most viable option, a bankruptcy lawyer will discuss the two bankruptcy types, Chapter 7 and Chapter 13. Generally, a bankrupt client must select one type over the other.
Chapter 7 bankruptcy is often known as “liquidation” or “straight” bankruptcy. The debtor has no hope of resolving debts through a payment plan, so assets and property with value are sold or “liquidated” in the hopes of returning at least some owed money to creditors. In return, creditors promise not to seek the full amount owed them by seizing all of the debtors’ property. The bankruptcy attorney can help Chapter 7 clients by helping them to determine which assets can be liquidated, and working with appointed trustees to do so. Taking court approved credit classes is now a requirement of filing for Chapter 7 bankruptcy, and a bankruptcy attorney can make sure clients complete the correct courses.
When filing for Chapter 13 bankruptcy, a client wants to protect assests by repaying debts, but can’t do so on the creditors’ schedules. In some cases under this type of bankruptcy, a debtor is not obliged to repay the whole amount owed, but pays a certain amount in a specified time frame. In other scenarios, the entire amount is repaid in court determined structured settlements. In this type of bankruptcy, an attorney is invaluable in helping to determine the type of settlement that works best for the debtor, and insures its fair administration. He or she can review applications and correct ones that have been submitted with errors, something non-attorneys may not do.
Be aware that being broke doesn’t mean you don’t have to pay for legal services, however. Fees vary depending on the type of bankruptcy filed under. Under Chapter 7, fees range from $500-$3500 and must be paid upfront, and under Chapter 13, the court determines payment guidelines based on individual cases.