If you are in desperate financial strait, and with creditors harassing you day in and day out for repayment of the debt, there is a good chance you will be looking for bankruptcy. If you believe bankruptcy can help you in the long run, do not hesitate to petition for it. Since everyone’s financial situation is dissimilar, there is no cookie-cutter that can fit your specific circumstance. You should seriously find a bankruptcy attorney to review your case and have him or her provide you with the options you are facing. While looking for a bankruptcy lawyer, you have to make sure the lawyer answers some major questions that you have been unsure of, such as:
I get harassing phone calls from the creditors all day long
One of the first things that should be explained to you when you are looking for a bankruptcy attorney is the concept of automatic stay. What automatic stay means is that you will free from the harassment of the creditors. The idea of automatic channel gives you the freedom from the harassment of creditors. If the creditors do not comply and continues to harass you, you can actually sue the creditors in return.
Chapter 7 bankruptcy or Chapter 13 bankruptcy?
The bankruptcy attorney you have selected should surely be able to explain to you the difference between chapter 7 and chapter 13 bankruptcy. In the case of chapter 7 bankruptcy, your non-exempt assets will be repossessed by the bankruptcy court to be sold off to meet the debt obligation to the creditors. Chapter 13 bankruptcy is entirely different than chapter 7 in that you will get to keep the assets, but you will be paying for it with installment payments. The payments from the chapter 13 agreement is typically an amount between 10% – 100% of the actual total debt payable up to 5 years.
What assets will you be allowed to retain?
It all depends on what form of asset it is. Some assets are considered exempt, which means that no one can take these assets, not even the bankruptcy court or judge. While on the flip side, you have assets which will be determined as non-exempt assets and they can be taken by the bankruptcy court to be sold off to repay the creditors.
Will you lose your retirement funds?
Exempt assets such as the 401(k) or IRA plans are normally protected from the bankruptcy court during the bankruptcy process. As stated previously, most of the time the retirement funds are protected from settlement. But in some rare occurrence, a percentage of your retirement funds can be subjected to the liquidation by the bankruptcy court to pay back the creditors. Since this type of situation is by far rare, you should definitely consult your bankruptcy lawyer to ascertain your options.
Will I lose my car post bankruptcy?
Many people worry that they will lose their cars post bankruptcy procedure. Movies popularize this misconception of cars being repossess by the repo man after you have filed for bankruptcy. This is simply not true. You will determine the blue book value of your car, and liken it to the monetary exemption of the car permissible under bankruptcy. If the blue book value is less than the exemption, then you will be eligible to keep the car.
To summarize, looking for a bankruptcy attorney to represent you is not an easy task. You want to interview bankruptcy lawyers just like an employer interviewing a potential candidate. You need to make sure that the lawyer is well-versed in the latest bankruptcy law. Besides knowing the law, the lawyer should also care about you as a person. Your bankruptcy lawyer should care about your wellbeing and help you plan for a better future. No one files bankruptcy every so often, and chances are you would want to make this occurrence only once in a lifetime. With that said, take your time to find the right bankruptcy lawyer who will get you through this situation unscathed.
Steve Sanchez has recently overcome the economic depression of 2008-2009 by declaring bankruptcy. Even though bankruptcy has devastated Steve financially and emotionally, Steve has rebuilt his businesses in the last 6 months and he has not looked back since.One of his project is to educate people on bankruptcy. Having gone through the ordeal himself, he has first hand knowledge of the pros and cons of filing for bankruptcy protection. Please visit his site http://ToFileBankruptcyOrNot.com if you want additional information regarding bankruptcy.