Filing for bankruptcy is an important decision. It can offer relief from debt and provide a fresh financial start. But navigating this complex process can be hard without professional help. If you are thinking about filing for bankruptcy, hiring an experienced Katy bankruptcy attorney may let you make the best decisions for yourself and your finances. An attorney can help you choose the right of bankruptcy to file and how this decision will affect your financial future.
Kinds of Bankruptcy
Before you hire a bankruptcy lawyer, it helps to understand the two main kinds of bankruptcy that people can file.
- Chapter 7 bankruptcy. Usually, this kind of bankruptcy is called liquidation bankruptcy. This filing allows you to discharge the majority of your unsecured debts like credit card balances, personal loans, and medical bills. However, some of your assets may need to be liquidated to pay off creditors, though a lot of filers can keep their assets under exemption laws in the state. In general, Chapter 7 bankruptcy is quicker than its Chapter 13 counterpart. Often, completing this process only takes a few months. It is ideal for people with limited assets and income.
- Chapter 13 bankruptcy. This is known as reorganization bankruptcy. It is meant for those with a regular income, but cannot manage their debt. Rather than liquidating assets, this type of bankruptcy filing lets you reorganize your debt and pay it off for a period of three to five years. With this bankruptcy, you must propose a repayment plan that a court must approve. This is a great option if you cannot make payments for a car loan and a mortgage regularly or if you do not want to lose your property.
No matter the type of bankruptcy you choose, consider your financial situation and long-term goals. A skilled bankruptcy lawyer can help you choose the right option for your case.
Importance of Hiring a Bankruptcy Attorney
Whether you succeed in your bankruptcy or not depends on the lawyer you hire. An experienced bankruptcy attorney can help you avoid making mistakes, make the filing process simpler for you, and improve your chances of a positive outcome. Below are the main reasons you need an attorney on your side when filing for bankruptcy in Katy:
- They are knowledgeable about bankruptcy law. Texas has complex bankruptcy law that tends to change constantly. A skilled attorney is familiar with legal changes and knows how to apply them to your case.
- They offer strategic advice. The best attorney will evaluate your situation and recommend a suitable course of action. Also, they can explain the possible consequences of bankruptcy filing, like its effect on your credit score or ability to apply for loans. They will provide you with a clear picture of what you can expect.
- They are familiar with the filing process. Bankruptcy filing involves plenty of paperwork, such as lists of assets, debts, expenses, and income. Omissions or errors in such documents can result in delays, fraud accusations, or denials. An attorney will ensure the necessary paperwork is prepared correctly and submitted on time. Also, they will guide you through the required credit counseling process. You must go through this process before you file for bankruptcy. With this process, you need to complete a financial management course. A lawyer will ensure you meet all the requirements.
Picking the Right Lawyer in Katy
When choosing a bankruptcy attorney, below are factors you must consider.
- Bankruptcy law experience. Choose an attorney with a track record of successfully handling bankruptcy cases, especially those similar to yours.
- Reputation. A lawyer’s reputation speaks highly of their ability to deal with your case effectively. Find reviews and testimonials from past clients to better understand the lawyer’s abilities.
- Consultation and communication. The majority of bankruptcy lawyers provide free consultations. During the initial consultation, focus on the way they communicate with you.