Do I really need a bankruptcy attorney?
Individuals may file a bankruptcy petition without an attorney. This is called appearing "pro-se." However, the bankruptcy code is very complex and filing a bankruptcy petition requires a thorough knowledge of both the bankruptcy code and other Federal and State laws. In addition, bankruptcy practice differs from court to court. Experienced bankruptcy attorneys are familiar with the local rules, both written and unwritten.
Filing your own petition is very risky. Often "do-it-yourselfers," or even lawyers lack proper experience and make serious mistakes with drastic results. A mistake can cause the unnecessary loss of assets, loss of a personal home, or even the loss of the right to receive a bankruptcy discharge. You may be able to read the bankruptcy code, but only an experienced bankruptcy attorney can provide a realistic assessment of what can and cannot be accomplished by filing a bankruptcy petition, and make sure that your case proceeds smoothly.
What exactly is bankruptcy?
Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as "liquidation" or "reorganization."
Under a liquidation bankruptcy (Chapter 7), you ask the bankruptcy court to wipe out (discharge) the debts you owe. Under a reorganization bankruptcy (typically Chapter 13, for consumers), you file a plan with the bankruptcy court proposing how you will repay your creditors. You must repay some debts in full; others may be repaid only partially or not at all, depending on what you can afford.
How can I protect myself against creditors?
When you file either kind of bankruptcy, something called an "automatic stay" goes into effect. The automatic stay prohibits most creditors from taking any action to collect the debts you owe them unless the bankruptcy court lifts the stay and lets the creditor proceed with collections.
Should I chose Chapter 7 or Chapter 13 bankruptcy?
In Chapter 7 bankruptcy, you ask the bankruptcy court to discharge most of the debts you owe. In exchange for this discharge, the bankruptcy trustee can take any property you own that is not exempt from collection (see "What property might I lose if I file for bankruptcy?" below), sell it, and distribute the proceeds to your creditors.
In Chapter 13 bankruptcy, you file a repayment plan with the bankruptcy court to pay back your debts over time. The amount you'll have to repay depends on how much you earn, the amount and types of debt you owe, and how much property you own.
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