Business people and lawyers discussing bankruptcy documents

Why an Attorney Is Important When Filing for Bankruptcy

The Orantes Law Firm Sept. 29, 2023

The bankruptcy process comes with tedious instructions individuals can follow to navigate on their own. However, that does not mean the process isn’t complex and precise. Hiring a bankruptcy attorney is tremendously beneficial.

At the Orantes Law Firm, we proudly assist clients with challenges involved with the bankruptcy process so you are stress-free. Our team has the knowledge, experience, and resources to focus on your best interests. Also, we help clients with their fresh financial starts every day in Los Angeles County, Orange County, Los Angeles, and Irvine, California.  

What Are the Benefits of Bankruptcy? 

Whether you file for Chapter 7, Chapter 13, or Chapter 11 bankruptcy, they share the same major goal: to give you or your business that fresh financial start. They can stop creditors from obtaining judgments against you and halt creditor harassment. 

With Chapter 7, your subject debts are erased, which leaves you the breathing room you need to get back on track. Chapter 13 and Chapter 11 can reduce debt and reorganize the rest so it can be repaid more comfortably. These chapters can hold off repossessions and keep a business in operation.

Moreover, bankruptcy opens the path toward repairing your credit score. That score is impacted for a period after you file but once you begin managing your credit wisely after bankruptcy, it can come back stronger than ever. 

Why Should I Hire a Bankruptcy Attorney? 

There are many benefits to hiring a bankruptcy attorney to represent you. An experienced one will be there to guide you at every turn. 

Your bankruptcy attorney will be able to advise you whether filing for bankruptcy is the wisest move for you. Your attorney will look at your current financial situation and then help you explore all options for righting your financial ship. If bankruptcy is the route you choose to take, your attorney will counsel you on the type of bankruptcy you qualify for and the best chapter for you to pursue.

Preparing for bankruptcy can be complicated. You will need to carefully inventory all of your debts, as well as your assets. You will need to decide what assets you are willing to sacrifice in bankruptcy. For example, in Chapter 7, most of your assets are liquidated to pay creditors before your debts are eliminated. When you file, you must include all relevant creditors and debts or lose the opportunity to address them in your case.

During the process, your attorney will keep you advised of the court’s actions and those of the trustee assigned to liquidate assets and negotiate with creditors. Your attorney will appear for you in court, file all necessary pleadings, and monitor creditor compliance with the stay order issued by the court. This order should halt all harassment by creditors included in your filing. If it does not, an attorney will intervene with the creditor and the court on your behalf. 

After the bankruptcy, your attorney will help you get the credit counseling you need to avoid making poor financial decisions in the future. Moreover, they will be there to answer any questions you have about credit score recovery and to counsel you on next steps to make the most of your fresh start. 

What Might Happen if I Don’t Hire a Bankruptcy Attorney? 

There are a few common pitfalls among those who file for bankruptcy without attorney representation.

  • You may file for bankruptcy when other options might have been more viable for you. 

  • You may file for an incorrect chapter and if so, the court will throw out your case. 

  • You may fail to include all creditors in your bankruptcy filing which means they can still harass you or obtain a judgment against you. Forgetting just one can greatly harm the advantage of filing for bankruptcy. 

  • In your attempt to navigate the process on your own, you may file too late to obtain the benefits of bankruptcy. For example, a delay could mean a creditor files a collection action against you in court which means you cannot include that debt in your filing. 

  • If filing for your business for Chapter 11 bankruptcy protection, mistakes can mean you have to close your company rather than keep it operating and earning profits while you reorganize. 

  • The process can cause you more stress than necessary because you are unfamiliar with it.  

These are just a few general aspects that could go wrong if you decide to proceed without hiring an attorney, but they are major issues you could otherwise avoid. 

What Should I Expect in a Bankruptcy Attorney? 

You should expect a great deal from your bankruptcy attorney, and good ones will deliver.

Your attorney should be competent and confident with the process, the forms, and dealing with the trustee assigned to your case. Above all, they should know bankruptcy law inside and out.

Your attorney should give you sound legal advice that includes all options. They should answer your questions fully and clearly, so you understand. Your attorney should be patient as you make important decisions about your case and your financial future. 

Your attorney should complete all the necessary paperwork and file all documents in a timely manner. They should be willing to appear in court with you or in your stead and be the conduit for all communications regarding your case.

Also, you should expect your bankruptcy attorney to do the job they have been hired to do, and to do it with honesty. 

You Deserve a Fresh Start. Learn How We Can Help. 

If you are considering bankruptcy, we are ready to talk. You don’t have to have your mind made up. We will help you explore your options and provide you with the information you need to make such a crucial decision. Plus, we will be here to help you carry the load, every step of the way. 

Sometimes, all you need is some sound legal advice from an experienced bankruptcy attorney. If you live in Los Angeles County or Orange County, California, call The Orantes Law Firm right now.