Maybe your bills started piling up after you lost your job, or you can’t make a dent in the medical bills you owe. Whatever the cause, if you owe much more than you can afford, bankruptcy could be a good option for you. It could help you regain control of your financial situation and give you the fresh start you need.
But while the decision to file is yours, it’s important to keep this caveat in mind: don’t try filing bankruptcy yourself! The process is complicated, confusing, and you could potentially make costly mistakes if you don’t understand the laws involved.
Gregory J. Wald, Attorney at Law can help you determine whether bankruptcy is right for you. We can also help you decide which chapter best suits your needs, and guide you through the process. Call us today to find out how a Minneapolis bankruptcy lawyer can help you get your finances back on track.
Is Filing for Bankruptcy the Right Choice for You?
Before filing bankruptcy yourself, you need to know if it makes sense for you. Important factors to consider before filing include:
- Types of debt you want to eliminate
- Whether you own non-exempt property
- Whether you have the funds to refund or resolve debts without bankruptcy
Generally, bankruptcy cannot wipe out these debts:
- Government penalties
- Spousal or child support
- Student loans
- Bills from fraudulent purchases
Within bankruptcy laws, there are many nuances and deadlines that often make them difficult to navigate without the detailed, working knowledge of them. Therefore, it is best seek the advice of a bankruptcy attorney instead of filing bankruptcy yourself.
Should You File Chapter 7 Bankruptcy or Chapter 13 Bankruptcy?
Many times, filing bankruptcy yourself results in your filing the wrong chapter. If you file Chapter 7 bankruptcy, you will be required to sell certain assets and use the funds to pay your debts. Then, any remaining debt gets wiped out. However, when you file Chapter 13, you do not have to sell your assets. When you file this chapter, you agree to pay your creditors over a certain agreed upon period of time. Meeting the criteria for either chapter can be difficult. Also, each offers its own positives and negatives.
For example, under a Chapter 13 filing, you won’t be forced to sell your home, car, and other property, but repayment plans are often rigid and strung out for a period of three to five years. However, you can get rid of large chunks fairly quickly when you file under Chapter 7, but you will need to sell your assets, including your house and vehicle, meet a complex means test.
A bankruptcy lawyer can help you weigh the pros and cons of each chapter, and help you come up with a solid debt recovery plan that meets your needs.
The Process Requires Many Steps
Filing for bankruptcy yourself may seem like your best choice, but most do not know what they are getting into until it’s too late. If you do it on your own, you may need to:
- File detailed bankruptcy forms
- Name all creditors and debts in the filing
- File exemption paperwork to protect certain assets
- Handle any challenges and attend any related hearings
- Hammer out agreements with your bankruptcy trustee
Filing Bankruptcy Yourself Is Time-Consuming and Potentially Costly
When you choose to file bankruptcy on your own, do not expect the court, your creditors, or any other involved parties to take pity on you if you make a mistake, miss a deadline, or file under the wrong chapter. If you file without a lawyer, you will be required to read and interpret all laws related to your bankruptcy.
Any mistake or oversight can result in:
- Losing property, like your home, that you could have kept if you filed the correct paperwork
- Paying debts that you could have had wiped because you forgot to list them on your bankruptcy
- Getting your claim dismissed because you failed to make promised payments because the terms were too unrealistic for you to meet
The right bankruptcy attorney can help you avoid these pitfalls, as well as save you expensive mistakes.