You have made the unpleasant choice to file for bankruptcy and you are wondering if you should hire an attorney or just represent yourself. You are already hurting financially and you know that an attorney will only end up costing you extra.
You should know that the majority of people who file for bankruptcy are represented by an attorney. People who file pro se often end up filing for the wrong chapter of bankruptcy or not preparing their case properly.
It is always a good idea to consult with an attorney when you are considering filing for bankruptcy. They can tell you what your alternatives are if there are any at all. For example, if your financial troubles are due to the Corona Virus, there may be several alternatives to actual bankruptcy, such as minimizing payments or forbearance on loans.
Although it may seem expensive, it can be even more costly to face bankruptcy court without an attorney. You should hire a bankruptcy attorney when you know that there is no way you can pay your bills.
Different Types of Bankruptcy
Chapter 7 is considered to be a liquidation form of bankruptcy. Most attorneys will recommend Chapter 7 to individuals who have never made very much money. It is generally employed when you cannot pay any of your bills or the majority of your bills.
Chapter 13 bankruptcy is used when a person needs to reorganize their finances. If you own property, you may be able to keep it if you complete a repayment plan successfully.
There is a means test that will determine the type of bankruptcy you should apply for and if you qualify for it at all. The test consists of three forms. An attorney will be well versed in filling out these forms. They will be able to tell you if your income is under the New Jersey Median. If it is, you will be exempt from the means test. You will also not be subject to the means test if you are a disabled veteran.
If your income is over the median, you will have to fill out paperwork to establish that you cannot pay for anything but necessities.
Nowadays many people are independent contractors whose incomes vary from month to month. Determining your monthly income may not be as easy as it seems. There are exemptions for things such as charitable contributions. A trained attorney will know exactly what forms of income and property are exempt in a means test. You should always have an attorney assist you with bankruptcy paperwork.
If you have had a windfall of some kind such as a bonus at work or a small increase in clientele at a business you own, it may affect your ability to file for bankruptcy. An attorney will be able to advise you if you should wait for a better time to file.
If you own a home or a car, an attorney can assist you in the valuation of the property. A lawyer can also make sure that all of your information is complete. When you file for bankruptcy, you are doing so under penalty of perjury. An attorney can make sure you have provided all the necessary information and that it is 100% accurate.
Using an Attorney After a Case has Been Discharged
If your Chapter 7 Bankruptcy goes through, your creditors will no longer be able to attempt to collect your debts. If they do try to contact you, an attorney can actually request that they be held in contempt of court.
Filing for bankruptcy is a difficult decision, but a good bankruptcy attorney can make everything go smoothly.