People who are in dire financial circumstances will often think about a Chapter 7 bankruptcy, but because money is tight, filing your own bankruptcy to save money is considered a smart option. But there are many reasons why this is not a good idea. The following are four of them.
An attorney can determine qualification
Just because you want a fresh start with your personal finances, does not mean that you can legally sweep away all that you owe. Creditors have rights too. If you have the ability to pay back some of your debt, a judge will see to it that you do. For this reason there are income limits associated with a Chapter 7 bankruptcy. These requirements are initially based upon the median income figure for your state. Income over this and you will be means tested. An attorney can help navigate the qualification process.
An attorney can determine which debts can be discharged
Many people are not aware of this, but not all debts can be discharged under a Chapter 7 bankruptcy. If you attempt to file on your own, and do not know which debts are eligible for discharge, you may find out that you are no better off after a bankrupt than before a bankruptcy. This is especially true if a large portion of your debt is not eligible under a Chapter 7 filing. Most student loan debt is an example of this.
You can refer collection calls to your attorney
If you use an attorney, he or she will contact your creditors and all harassing phone calls will stop. If for any reason a collection agency still calls, then you can refer them to your attorney. If you file on your own, it may take more than a simple statement that you are filing for bankruptcy. They will want specific information. And once they realize you are handling your own bankruptcy, they may challenge your filing.
If challenged, you will have an advocate
If a creditor believes you have any assets that can be used to settle a debt or you simply make enough money to pay back the debt, they can challenge your bankruptcy. If this happens, you will be at a disadvantage without an attorney. Bankruptcy is no different that any other area of the law. If you want to be your own attorney, you will have a fool for a client.
Although it may seem straightforward, filing for Chapter 7 bankruptcy can become complicated quickly. It is best to have an attorney from the start. You will know whether you should file for Chapter 7, or perhaps it makes more sense to file for Chapter 13. Whatever your situation is, an attorney can explain to you what your options are. To learn more, contact a law firm like Hoffman, Hamer & Associates, PLLC.