The legal system is vast. Attorneys spend years learning their trade, studying for the bar exam, and becoming proficient at what they do. When navigating any legal landscape, it is always wise to consider consulting an experienced Long Island bankruptcy lawyer, because attorneys can help you avoid simple pitfalls that may be hidden to the layperson.
Bankruptcy is one such landscape. When you’re down on your luck and have a difficult time paying your bills, you may see this as an option. Because of your financial situation, you may also see hiring an attorney as unrealistic. After all, if you don’t have the money to pay your bills, you may be wondering how you can afford an attorney. Again, attorneys can help you avoid simple pitfalls. Filing for bankruptcy can be tricky, and you want to avoid these pitfalls if at all possible.
Types of Bankruptcy
For most people, there are two types of bankruptcy: Chapter 13 bankruptcy and Chapter 7 bankruptcy. Businesses have their filing category, but most individuals will fall under Chapter 13 or Chapter 7.
The first thing that you will need to do when filing is to determine if you meet the means test. The means test is a way to determine if you are financially able to pay your bills. Courts are going to want to look at your finances for the past few months, your income tax filing for the previous year, and your current financial situation. To file Chapter 7, you have to be in a situation that does not allow you to pay your bills. If you can pay your bills but need them reconstructed under a manageable payment plan, you’ll qualify for Chapter 13. The means test alone is something with which you may struggle without an attorney.
For instance, it may be difficult to understand how bills affect the process. Credit card bills, personal loans, auto loans, mortgages, student loans, medical bills, and other financial obligations are all handled somewhat differently under the law. Some people have very simple and straight-forward cases, and perhaps they can file without an attorney. Other people will have multiple creditors and will need legal assistance to make the best decision.
The Overall Bankruptcy Process
Filing requires that you know a lot of information about yourself, your creditors, your financial information, your status, and so forth. You’ve got to gather all of this information to determine if you qualify for Chapter 7 or Chapter 13. If you just go to a court to collect the necessary paperwork and instructions, you’ll be faced with the task of learning the process from the get-go. A lawyer will be able to ask you the right questions and gather the answers and information on your behalf to complete the bankruptcy packet more efficiently and effectively.
The more debt you have, the more difficult the process. A lawyer will ask you questions to make sure you meet the means test for the right filing. If you have a lot of debt and decide to go it alone, it’s possible you will miss pertinent information and file incorrectly. Most filings will require approximately 75 to 100 pages of information that you will need to provide. The more complex your financial situation, the more difficult the filing process. For a seasoned lawyer with experience filing cases on behalf of clients, the process is more navigable.
The Bottom Line for Filing Bankruptcy
The reason anyone files for bankruptcy is to reduce debt. Discharge of debt relieves a lot of stress for a person struggling with finances, but if the process is not completed correctly, there is a chance that discharge won’t occur for all debts. If you make the mistake of not listing all of your debts correctly when you file, you risk being left with debt once the process is complete. You want to be free from debt (if you’re filing Chapter 7) or have a more manageable payment (if you’re filing Chapter 13), and if you accidentally leave off important information, you may wind up with a completed bankruptcy while still owing creditors.
Going back to the beginning of this article, it may seem like you can’t afford to hire an attorney to file for bankruptcy, and it is possible to file without one; however, because it is so difficult to navigate the legal landscape, you risk making mistakes that could wind up costing you in the long-term. Before you file for bankruptcy, be sure to consult with an attorney to make sure you know what you’re doing before you begin. If after your consultation you feel that you are unsure how to proceed, then your best bet will be to file with the help of an attorney rather than going it alone and risking your financial future.