Every year, thousands of people in the United States file for some form of bankruptcy. In 2014, about 97% of the bankruptcy filings were personal and about 3% were filed by businesses. Roughly 62% of all of these were caused by medical debt, according to research done by Harvard University. Student loan debt is also a driver of bankruptcy filings around the country. Nearly 15,000 bankruptcies each year are caused by student loans. No matter what reason you think you need to file for bankruptcy, bankruptcy lawyers should be consulted before you do anything. Here are some reasons to do that:
- Bankruptcy attorneys can help evaluate your financial situation. As dire as your financial situation may seem to you, going to a reputable bankruptcy law firm can help you get more information about your situation and the lawyers there can let you know what all of your options are. There may be ways you can avoid filing bankruptcy. They can also help you understand what will be expected of you if you go through and file for a bankruptcy.
- They can help you navigate the process. Filing for any kind of bankruptcy is a complicated process. The rules and regulations that govern who can file for bankruptcy, what debt can be forgiven via a chapter 7 bankruptcy or a chapter 13 bankruptcy, and all the other hoops you have to jump through to be successful with your filing are changing all of the time. Having a good lawyer by your side can help you make sure you get it all done correctly and on time.
- A bankruptcy lawyer can help you get the paperwork right. Even the smallest problem with the paperwork you are filing for your bankruptcy can cause a delay in the process or even cause the filing to fail. It is hard to overstate the amount of paperwork that needs to be compiled, the data that needs to be collected, and the forms that need to be filled out when you are filing for any type of bankruptcy. Not only can you be denied your bankruptcy filing but in some instances, filling out the forms wrong can lead to criminal charges being filed against you. If the Department of Justice thinks your “mistakes” were done on purpose, it can be considered fraud and that is a felony.
- A good bankruptcy law firm can help protect you from the people to whom you owe money. When you owe money to companies, they can hire collection agencies to hound you to try to get you to pay your debts. These calls can be annoying and bothersome. The good news is that when you work with bankruptcy lawyers, they can make the harassing phone calls and letters stop. Once you have filed for bankruptcy or announced your intention to file, your creditors are legally required to stop calling and writing.
- A lawyer can give you advice. When you have hired a good bankruptcy lawyer, they can work with you to get the help you need to not end up back in the same position again in your life. They can put you in touch with credit counseling services that will teach you how to better manage your money and deal with your debt. The court requires people who file for bankruptcy get help to teach them how to make a budget and deal with their money in a responsible way. Your lawyer can help as well.
- A good lawyer can help you get peace of mind. When people file for a chapter 7 bankruptcy on their own, this is also known as going “pro se,” they have a 60% chance of success. That number climbs to over 95% if they have a bankruptcy attorney. If a person is filing for chapter 13 bankruptcy, they have a .04% of succeeding when they do it pro se, that number climbs to over 55% when they have the help of an attorney.
It is never a pleasant thought to have to file for personal bankruptcy. While it can feel like real failure, it can really help you restore your financial life.