When bills start to pile up, and all you keep getting are repeated calls from creditors who want you to pay up immediately, life can seem overwhelming. Some creditors might go as far as filing lawsuits against you to claim debt. At this point, it might be difficult for you to see a way out of all of it, but there is one: bankruptcy.
Declaring bankruptcy can be vital in addressing the current situation, giving you room to start anew. However, bankruptcy is not something you want to file for without proper legal guidance, and that is where a bankruptcy attorney can be helpful.
What Is the Primary Purpose of a Bankruptcy Attorney?
Many people do not consider hiring a bankruptcy attorney because they are unaware of the reasons they need one. Bankruptcy laws are complex and require professional guidance. A bankruptcy attorney can provide professional guidance and serve as a strategic advisor for you through the process.
Every financial challenge is unique to the individuals, and bankruptcy attorneys understand this when approaching every case. They start by assessing the overall situation, analyzing debts, income level, and the different legal avenues available to you. From this evaluation, they can determine whether filing for bankruptcy is the most appropriate strategy for you.
Beyond addressing your current debt situation, bankruptcy attorneys focus on the bigger picture: creating a more sustainable financial future for you. Although the laws are complex, bankruptcy helps affected individuals get a fresh start with the proper steps in place.
Guiding Clients Through Chapter 7 and Chapter 13 Options
Most individual bankruptcies in Michigan fall under either Chapter 7 or Chapter 13 of the United States Bankruptcy Code. While both provide debt relief, they operate differently and serve different financial circumstances.
Chapter 7 bankruptcy eliminates unsecured debts such as credit card balances, medical bills, and certain personal loans. It is often referred to as “liquidation bankruptcy,” although in many cases, clients can keep most or all of their property due to exemptions permitted under Michigan law. An attorney evaluates the eligibility requirements, including the means test, and ensures that all necessary documentation is accurate and complete.
Chapter 13 bankruptcy, on the other hand, creates a structured repayment plan that spans three to five years. Individuals who earn a regular income but need time to catch up on missed mortgage payments, car loans, or tax obligations often find this option more suitable. A bankruptcy attorney helps design a feasible plan, negotiates with creditors, and submits the proposal to the court for approval.
“Choosing between these two options requires careful analysis, and the attorney’s role is to guide clients through the advantages, limitations, and long-term consequences of each,” says David Ienna of Fairmax Law PLLC.
Protecting Clients From Creditor Harassment and Legal Action
One of the immediate benefits of working with a bankruptcy attorney is the automatic stay’s protection. Once you file a bankruptcy petition, creditors must halt collection efforts. These collection efforts include wage garnishments, foreclosure proceedings, repossession attempts, and constant phone calls.
However, you have to file the paperwork properly, and the information must be complete for the automatic stay to take effect. A bankruptcy attorney ensures accuracy and timeliness, preventing delays or errors that could permit creditors to continue their actions. This legal shield provides clients with immediate relief from the stress and instability of aggressive collection practices.
Beyond filing, an attorney handles all communication with creditors, protecting clients from intimidation and ensuring creditors comply with federal and Michigan debt collection laws.
Conclusion
Financial distress is not a situation anyone wants to be in, but one many people face, and sometimes get overwhelmed by. In such a situation, seeking professional legal guidance can help you find the most suitable strategy. A bankruptcy attorney in Michigan can provide that guidance, so contact one today.