Chapter 13 Bankruptcy Attorney Will They Clear Up Debts?
In the past, hiring a Chapter 13 bankruptcy attorney was as simple as opening a phone book. Today, it isn't quite as easy. When the new bankruptcy laws went into effect in 2007, a provision was included which requires lawyers to attest to their clients bankruptcy petitions. In a nutshell, this provision requires lawyers to state they believe their clients' petition is necessary. If clients are not completely honest when providing details about their financial situation, the attorney assumes significant risk.
Today, retaining the services of a chapter 13 bankruptcy attorney is more costly. In addition to the above mentioned risk, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) require lawyers to engage in additional casework to ensure their clients have a legitimate need to file for bankruptcy protection. This has resulted in higher legal fees; making it more difficult for average Americans to obtain appropriate counsel.
Although there is no law requiring debtors to obtain a lawyer to handle their bankruptcy case, few people possess the skills or knowledge to go it alone. Filing for chapter 13 bankruptcy protection involves submitting a petition to the court; notifying creditors and arranging a 341 meeting; obtaining credit counseling through an approved agency; and filing legal documents in a timely fashion.
Individuals whose earnings are at or below poverty level may be entitled to pro bono legal counsel. Chapter 13 bankruptcy attorneys offering free services can be located through the American Bar Association. The ABA has offices located in most major U.S. cities.
When hiring a bankruptcy lawyer, experts suggest consulting with three or four attorneys before making a final decision. Make certain the attorney is well-versed in BAPCPA. Just one missed deadline or improper form can result in dismissal of the bankruptcy petition.
Be organized and on-time for your meetings. Ask questions and write down the answers. When calling to arrange your meeting, ask what information to bring along. Most attorneys will require a thorough analysis of your financial situation including income, expenses and details of outstanding debts.
Filing chapter 13 bankruptcy can be quite costly. In addition to attorney fees, debtors must pay fees for court filings, credit reports and credit counseling. Since Chapter 13 requires debtors to repay a portion of their debt, a large percentage of income must be paid to the bankruptcy Trustee each month.
Repayment plans typically last three to five years. Debtors are not allowed to take on any new debt unless approved by the bankruptcy judge. If debtors miss a payment without good cause, the Trustee can petition the court to have the bankruptcy dismissed.
An unfortunate truth is nearly 75-percent of people fail out of bankruptcy. When this occurs the debtor loses protection from bankruptcy and creditors can initiate collection actions; including foreclosure. When you plan to fail out of bankruptcy and own real estate you will need to get rid of the property or the debt will follow you. You will need a private investor like Simon Volkov to take it off your hands.
Debtors who file bankruptcy to stop foreclosure are rarely aware of one very important fact... If the debtor is unable to make chapter 13 payments, the lender can proceed with foreclosure at the exact point where they left off.
For example, if a debtor was five days away from foreclosure when his bankruptcy petition was approved and fails out of bankruptcy six months later; the property can be foreclosed upon within 5 days.
Considering the odds, you might do better with a less radical debt reduction plan. We offer a comprehensive bankruptcy and personal money management article library and invite you to spend some time with us. Here you'll find a variety of articles on credit counseling, budgeting, debt consolidation and much more.
Published on December 15, 2008 at 03:47 AM | Comments: 1
| | Printer friendly