The Advantages of Using a Lawyer for Bankruptcy

By Anna Green

Bankruptcy is a legal status for which individuals and businesses may both file. Ultimately, individual debtors and companies choose to file bankruptcy when they are unable to repay their debts. Common types of bankruptcy for individuals include Chapter 7 bankruptcy, which requires debtors to liquidate assets to cover their debts, and Chapter 13 bankruptcy, which creates a structured repayment program. Chapter 7 bankruptcy also creates a reorganization plan for qualifying businesses.

Experience

Hiring a bankruptcy attorney, or consulting an online legal document provider, is often a good choice simply because bankruptcy law is complicated. Although it is possible for some individual debtors to file for bankruptcy without professional assistance, bankruptcy proceedings often require knowledge of both state and federal law. Additionally, bankruptcy cases require extensive paperwork and detailed documentation of all the debtor’s liabilities and assets. Since an attorney already understands the rules governing bankruptcy paperwork and statutory filing requirements, using legal representation can make the process proceed smoothly and expediently. Further, even seemingly minor mistakes in the bankruptcy petition and filing process can compromise a filer’s rights, so ensuring paperwork is completed correctly is a potential benefit of hiring an attorney, or consulting an online legal document provider.

Representation

Bankruptcy requires debtors to communicate with their creditors about negotiations, settlements and specifics of the court proceedings. Some bankruptcy filers may feel uncomfortable making these calls or feel unsure they are communicating the appropriate information to the right parties. A bankruptcy attorney will handle these communications in addition to representing the debtor in court proceedings and meetings. Moreover, while individuals generally may file for bankruptcy without an attorney, the United States Federal Judiciary explains that partnerships and corporations must retain a lawyer to file for bankruptcy. Thus, some entities may have no choice but to retain professional representation.

Get a free, confidential bankruptcy evaluation. Learn More

Insurance

Attorneys carry malpractice insurance, which means that if a lawyer makes a mistake on a bankruptcy case, the bankruptcy filer may be entitled to compensation for his or her losses. No equivalent protections exist for pro se filers — that is, persons who handle their own bankruptcy cases. In other words, retaining an attorney can provide bankruptcy filers with an added level of security.

Professional Courtesy

Unlike most bankruptcy filers, attorneys generally have established connections with clerks, judges, other attorneys and various other parties to their clients’ cases. Likewise, they generally have a strong knowledge of the court system handling their client's case. Although this does not give bankruptcy lawyers any legal advantage over pro se filers, an attorney’s professional connections can help keep the case moving through the system.

Get a free, confidential bankruptcy evaluation. Learn More
Disadvantages to Filing Chapter 13 Bankruptcy
 

References

Related articles

Types of Bankruptcy Fraud

Bankruptcy fraud is engaging in any act that misleads the bankruptcy court. There are several types of bankruptcy fraud including concealing assets and filing for bankruptcy multiple times in different states. If you commit bankruptcy fraud, the consequences can be severe including the dismissal of your bankruptcy case, fines and possible jail time. Learning about the possible types of bankruptcy fraud can help you avoid making costly mistakes.

Can I Get Legal Aid for Bankruptcy in Ohio?

If you want to file for bankruptcy in Ohio and lack the money to hire an attorney, legal aid organizations might be able to help you. Assistance is available from the Ohio State Legal Services Association for people who qualify based on low-income eligibility requirements, and you might be able to get help from other legal assistance programs even if you don't meet OSLSA's income eligibility standards. You also have the option to handle bankruptcy pro se — representing yourself — but it generally isn't a good idea. Bankruptcy laws are complex, mistakes can prove costly and lead to a dismissal of your case, and bankruptcy proceedings have both short-term and long-term consequences.

Pros & Cons of Filing Bankruptcy

Individual debtors frequently file for bankruptcy under Chapter 7 or Chapter 13 of the Bankruptcy Code, and either course can provide more pros than cons for certain debtors. To file under Chapter 7, you must meet certain income qualifications, but under Chapter 13, you must follow a repayment plan over three to five years. At the end of either type of bankruptcy, you may receive a discharge, or elimination, of certain remaining unpaid debts.

Bankruptcy

Related articles

The Average Cost of Chapter 7

Filing a Chapter 7 bankruptcy case may seem like a costly endeavor. The fees and costs associated with a bankruptcy ...

LLC Vs. PC

While the sole proprietorship remains a popular business form for many entrepreneurs, professionals such as doctors, ...

Is Bankruptcy Public Knowledge?

Unless you are famous or do something dramatic to make a splash, it is not likely that your bankruptcy filing will make ...

Can I File Bankruptcy if I'm Not Late on My Payments?

If a financial storm is brewing, you have the option to file for bankruptcy protection. The federal bankruptcy code ...

Browse by category
Ready to Begin? GET STARTED