Chapter 7 bankruptcy helps people quickly deal with mounting financial pressure. A successful Chapter 7 bankruptcy results in the discharge of eligible unsecured debts and provides relief from escalating collection efforts that could include lawsuits, foreclosure and vehicle repossession.
Some people try to manage the Chapter 7 bankruptcy process on their own behalf. They may do themselves a real disservice, as the mistakes or oversights that they make could limit their chances of success or undermine how much relief they actually receive from the bankruptcy process.
A bankruptcy lawyer can provide critical support to those trying to correct their financial circumstances. What benefits does legal representation provide for those pursuing Chapter 7 bankruptcy?
1. Means testing assistance
People have to prove that they qualify for Chapter 7 bankruptcy. The means testing process involves adjusting the income of the filer based on the wages and other income they received over the last six months. They must then compare it with the median income for a household of the same size according to federal data. Lawyers can help their clients access the most recent income data provided for bankruptcy filers and can assist with the process of making appropriate adjustments to their income.
2. Exemption optimization
Chapter 7 bankruptcy is also known as liquidation bankruptcy. Filers have to provide an inventory of their assets to the trustee overseeing their case. If they cannot exempt all of their assets, the trustee may order their liquidation to generate funds to repay creditors. A bankruptcy attorney can help a Chapter 7 filer understand the exemptions available to them and apply them to their resources in a way that can help them avoid any liquidation obligations or minimize what assets are vulnerable.
3. Support with paperwork and hearings
Submitting all of the necessary documents to the courts can prove challenging for those without legal experience. Remaining calm and composed during hearings can also be a challenge. An attorney can handle all of the legal details so that filers can focus on their careers and their families.
People who work with a lawyer can feel more confident about their chances of success and can also reduce the stress that they experience throughout the bankruptcy process. Securing adequate support can help make Chapter 7 bankruptcy more accessible to people struggling with their financial obligations.
