If you're considering declaring Chapter 7 bankruptcy, you may be wondering whether a lawyer is really necessary in order to be successful. The truth is that doing your bankruptcy filing on your own is not a good idea, especially considering the recent changes in the bankruptcy statutes.
In 2005, Congress passed a new law that made some changes to the rules. The process has become more complicated and tedious, even though bankruptcy is still available as an option for many Americans.
The idea behind the new rules is to try and make sure that people who declare bankruptcy are truly in need and not just trying to avoid paying their debts. Therefore, the bankruptcy court will look at your income and expenses very closely to determine whether you really deserve to have your debts completely wiped away.
Even if you are not allowed to file Chapter 7, you can still choose to declare chapter 13 which allows you to establish a repayment plan over the next few years. Your eligibility for Chapter 7, which normally wipes out most or all of your debt completely, depends on the specifics of your financial situation.
A lawyer is really essential these days given how complicated the bankruptcy code has become. Your attorney can also help you avoid common mistakes that people make when they're about to declare bankruptcy, like paying back a loan to friends and family members.
It's probably not difficult for you to see why a lawyer is important in this process, but you may be concerned with how you're going to pay the attorney fees given your financial circumstances. After all, you are already bankrupt, so how can you afford to add on other bills?
First of all keep in mind that you will hopefully be able to eliminate your current obligations through bankruptcy, so this will make paying your attorney more realistic. As soon as you file your petition, all of your obligations will be put on hold and debt collectors will have to stop their activity. This can give you some much-needed breathing space in order to pay your lawyers as well.
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