It’s amazing how quickly things can change. One minute you’re financially secure, with a home, a car, a business or secure employment, and perhaps even savings. A minute later, illness, unemployment, or another crisis occurs, and you’re faced with the loss of everything that you’ve worked for.
And even more upsetting than facing the loss of income and property? The loss of your personal dignity. When your life is overturned by crisis, it’s difficult to upright it and to move on when you feel that this was all your fault. It’s even harder when you feel that the outside world feels the same way. Being worried that you’re being watched and judged can make it difficult to take advantage of resources to help you turn things around.
Declaring bankruptcy for example, indicates financial failure to many, and the impression that the debtor is trying to discharge financial obligations. But even in an improving economy, it’s easy to get swept up into serious financial trouble. It’s possible to rebound from even total bankruptcy, but a debtor shouldn’t attempt this alone. So what should they do if they are facing bankruptcy?
Start By Considering Your Options
Before declaring bankruptcy, a debtor should meet with a neutral financial adviser to discuss all options. It’s possible that in cases of lessor debt, a debtor may be able to pay off amounts owed by working with individual creditors, refinancing, or debt consolidation. Unfortunately, a credit-repair “shadow industry” has sprung up over the years, resulting in a number of credit companies arising that are criminal in nature, or that are unqualified to guide debtors through credit repair. That’s why sound, impartial financial advice is so important at this point in the process. Even if a debtor isn’t certain if declaring bankruptcy is the right step to take, visiting a bankruptcy lawyer is a good first move. One of the functions that such an attorney serves is to function as a sounding board. If a debtor wants to explore alternatives to bankruptcy, a bankruptcy lawyer can review options with the debtor, and even help to set up payment plans that will protect both debtors and creditors.
All Options Have Been Reviewed. Declaring Bankruptcy Looks Like The Best One. Now What?
Once a debtor and adviser have reviewed all options and bankruptcy has been determined to be the best solution, if a bankruptcy lawyer is not already part of the “debt team”, he or she should be consulted. One of the determinations that he or she will help the debtor make is what type of bankruptcy the debtor should file for. In terms of personal bankruptcy, debtors have the option of filing for Chapter Seven or Chapter Thirteen bankruptcy protection. These bankruptcy options have complex laws, restrictions, and penalties, and debtors should definitely work with bankruptcy lawyers before filing to determine which protection best fits the debtor’s needs.
Chapter Seven bankruptcy allows debtors to “discharge” (don’t have to pay) part or all of their debts to creditors. To qualify for this type of status, it must be determined that the debtor has no assets, or prospects of future assets to repay debts, and has no other means of reliable repayment. Creditors usually are not permitted by law to seize a debtor’s property, automobiles, (they are allowed to seize “luxury” items) etc. to repay debts, although they may take a debtor’s liquid assets (usually checking or savings accounts). To qualify for Chapter Seven bankruptcy protection, debtors must take a mandatory credit counseling course.
The great advantage to this type of bankruptcy is that all debts are “forgiven” (cancelled). If the debtor’s financial status dramatically changes in future, he or she is not required to pay back former creditors. But there are many disadvantages in being forced to seek this type of bankruptcy as well. A debtor’s credit is destroyed, often for up to a decade. Chapter Seven filers usually find it impossible to obtain loans, credit cards, and mortgages. Serial bankruptcy filers can only apply for this type of protection once every six years.
Chapter Thirteen bankruptcy protection is often known as “wage-earners’ bankruptcy”. This type of protection allows qualified debtors to repay their creditors under a restructured plan. Depending on debtors’ circumstances, these plans last between three to five years. In order to qualify, debtors must have a certain amount of structured and unstructured debt. They must have shown themselves to be diligent about attending court hearings and in complying with the demands of the debt court.
There are many advantages to seeking this type of bankruptcy protection, such as saving credit and protecting seizable assets. Another advantage of Chapter Thirteen bankruptcy protection is that creditors may not continue to try to collect monies after the debtor has been approved for Chapter Thirteen. And any assets acquired after the filing by the debtor can’t be seized by creditors. Other types of bankruptcy protection are Chapter Eleven for businesses, and Chapter Twelve for farmers.
What Is The Attorney’s Role In Bankruptcy Filing?
Legally, debtors can file for bankruptcy without an attorney. And the options described above may make filing for this protection seem like a debtor’s dream. Actually, the opposite is true. Bankruptcy is a lengthy and unpleasant process, and federal laws passed over the last couple of decades make it far more difficult for debtors to apply for it. Hiring a attorney is definitely recommended, for the debtor’s protection. And bankruptcy lawyers can:
- guide clients to the best options
- handle creditors for debtors
- appear at hearings for debtors
- help to create restructered repayment plans
- protect clients’ assets
How To Choose The Best Bankruptcy Attorney
Debtors looking for a Tulsa bankruptcy lawyer should look for a firm that can offer:
- references from clients, colleagues and legal clinics
- malpractice insurance coverage
- experience and an acclaimed reputation
Above all, the firm should treat debtors with dignity during this difficult and painful process. The firm of Baysinger Henson Reimer & Cresswell is well aware that bankruptcy filing is a difficult, “back against the wall” decision for any individual. Their experienced, professional team will employ all of their expertise and resources to get clients through this process in an expedient and dignified manner. So when looking for a Tulsa bankruptcy lawyer, debtors should contact the offices of Baysinger Henson Reimer & Cresswell to learn how to leave financial problems behind, and keep dignity intact.