Filing for Bankruptcy: A Legal Perspective

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Consumers frequently overlook the primary purposes of bankruptcy:

  1. it protects you from creditors; and
  2. it relieves you of some, or possibly all, of your financial obligations.

A bankruptcy lawyer

A bankruptcy lawyer is the person you need if you want your assets protected from creditors and your debts discharged.
However, despite the fact that it is legal to file for bankruptcy “pro se” (on your own), statistically speaking, hiring an attorney will result in a better outcome.
When personal debt becomes unsustainable and there is little possibility of a solution in the near future, many people consider filing for bankruptcy, the personal finance nuclear option.

A Chapter 7 bankruptcy discharge is the most extreme option (and frequently the best option) for those who have serious financial difficulties, but the courts don’t allow anyone to receive a Chapter 7 bankruptcy discharge.
According to Ed Flynn of the American Bankruptcy Institute, lawyers handled 91.5 percent of the 486,347 Chapter 7 cases filed in 2017. In 96.2 percent of the cases, lawyers were able to get their clients’ debts dismissed, which means they were completely erased.

To put it another way, 428,097 people were able to avoid court-ordered debt collection proceedings. A three-to-five-year repayment plan must be agreed upon and adhered to in order to keep property in Chapter 13 bankruptcy.

What do you think is the superior option?

Because Chapter 13 permits you to keep your assets, including your home, if you are able to keep up with both the mortgage and the bankruptcy payments, the immediate impulse is to say so.
However, Chapter 13 contains pitfalls and perils not present in Chapter 7. According to a ProPublica investigation conducted in 2017, people who filed for Chapter 7 bankruptcy were considerably more likely to have their cases settled. 96% of people who filed for Chapter 7 bankruptcy relief did so between 2008 and 2015. Only 41% saw a Chapter 13 discharge filed.

For other people, bankruptcy under Chapter 13 is simply a horrible decision because of its many advantages and disadvantages. Among the concerns expressed by the participants were:
At a far higher percentage than in Chapter 7, the chapter fails.

  • Paying a lot of money
  • Your financial situation may be adversely affected.
  • African Americans are particularly hard hit.
  • Failure to file for bankruptcy may result in the loss of your home and other assets.
  • Smaller likelihood of success. Due to a lack of success, budgeting skills have not improved.

A mere 66.7% of those who represented themselves in bankruptcy proceedings under Chapter 7 were successful. In fact, the figures for customers who file for bankruptcy under Chapter 13 are even more extreme. A meager 2.3% of the time, consumers successfully represented themselves in court. Chapter 13 cases have a success record of 41.5 percent—debts are dismissed after completing a repayment plan if a lawyer represents the client.
To put it another way, bankruptcy lawyers can help you get back on your feet if your financial situation has taken an unexpected turn for the worse. For more help in this matter please click this link עורך דין פשיטת רגל בנתניה