Bankruptcy allows individuals or businesses to start fresh by forgiving debts they cannot pay. It also gives creditors a chance to regain some debt repayment through the liquidation of assets. Bankruptcy proceedings involve a lot of paperwork. An attorney can ensure that all documents are accurate and filed properly.
Negotiations with Creditors
Often, when debt is out of control, it becomes necessary to negotiate with creditors. Creditors, like banks and mortgage companies, make their money by collecting payments on outstanding balances. They employ a variety of tactics to do so, including phone calls, emails, and letters. Experienced Maryland bankruptcy attorneys can help clients work with creditors to find new payment terms that fit within the client’s budget. This helps them avoid the need for full bankruptcy proceedings. Attorneys also understand how state laws regarding property exemptions can affect a client’s eligibility for certain bankruptcy forms. They also know how to properly declare retirement accounts, protecting them from losing these assets.
Preparation of Financial Statements
During bankruptcy proceedings, debtors must complete the Statement of Financial Affairs, which requires detailed financial information such as the number and types of assets owned, how much income is earned, and more. Having an attorney review the form to ensure accuracy and to address any questions or concerns is essential. An attorney can also help prepare a budget based on the debtor’s current earnings and future earning potential if they plan to file for Chapter 7 bankruptcy, which has strict means testing requirements.
A good bankruptcy attorney can help identify exemptions that may save certain personal items from liquidation, such as a primary home up to a limit of one vehicle per family and valuable investments and retirement accounts. They can also guide you through the complexities of state and federal exemption laws to ensure that you fully disclose all assets and debts. This information is critical to ensuring a bankruptcy case meets all legal requirements.
Representation in Court
A bankruptcy attorney can effectively advocate for clients in court or with creditors. They can also assist their clients with other legal issues arising during bankruptcy. For example, if debt collectors harass you, your lawyer can deal with them. They can also ensure all paperwork is properly filed and deadlines are met. They can also help you understand which debts the court will discharge and which will not.
If circumstances change, bankruptcy attorneys can also help you modify your bankruptcy repayment plan. They can also advise you on which property you can keep and provide input on the tax consequences of your bankruptcy. Attorneys specializing in bankruptcy practice are a good choice because they are likely aware of the granular details of this area of law and are current on all developments in the field.
Preparation of Tax Returns
Many people do not keep all their tax documents, so when they file bankruptcy, it’s a big job to prepare past years’ income tax returns. A bankruptcy law firm can do this quickly. They can contact old employers, request transcripts from the IRS and go through bank statements to retrieve receipts. The earlier they start this work, the sooner you can get bankruptcy protection.
The attorneys can also help you accurately value assets and determine which debts can be discharged. They can also assist you in preparing your Chapter 13 repayment plan and ensure all deadlines are met.
Some bankruptcy attorneys only deal with high-volume cases and rely on paraprofessionals to handle much of the work for them. Those are sometimes called “bankruptcy mills.” They may not give you the personalized service you deserve. They may also miss important nuances. A seasoned bankruptcy attorney can ensure you understand your options and protect your long-term financial health.