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Working with a bankruptcy attorney

On Behalf of | Dec 9, 2022 | Personal Bankruptcy

When Michigan consumers find it impossible to repay their debts, they may file for bankruptcy. Doing so involves more than completing forms and submitting them. The debtors must file a petition in a federal courtroom. Many of them will seek the assistance of a bankruptcy attorney to help them in the process.

Bankruptcy attorneys

Debtors could attempt to represent themselves in bankruptcy court, but the outcome could be troubling. A discharge means the debtor no longer has an obligation to pay. American Bankruptcy Institute notes that less than half of people representing themselves had debts discharged. However, 94% of debtors represented by an attorney had their debts discharged.

Experience counts when working through bankruptcy courts, and an attorney can help with property valuation and examine whether debts might be dischargeable. Not all debts go away when filing for bankruptcy. Alimony and personal injury judgments related to drunk driving would be examples of debts that remain. Student loan obligations may be addressed when dealing with hardships. However, it may be wise to rethink financial steps to deal with these obligations and avoid problems that led to bankruptcy in the first place.

The attorney could speak with a client about what bankruptcy option is advisable. Chapter 13 might be workable for some debtors, but others may benefit from Chapter 7. An attorney could keep a client out of trouble by helping report all debts and assets to the court.

Reasons for bankruptcy

Debtors who file for personal bankruptcy get a chance at a fresh start. Bankruptcy proceedings might also reduce much of the stress and anxiety a person suffering from crushing debt feels. While the individual’s responsibilities won’t completely disappear, collection actions cease.

Those required to make payments as part of a Chapter 13 payment plan should not miss any. Doing so could lead to the bankruptcy’s dismissal, meaning collection action commences.