Bankruptcy Law Firm Ogden UT, Bankruptcy Attorney Ogden UT, Bankruptcy Lawyer Ogden UT

Things to Know When Hiring a Bankruptcy Law Firm in Ogden UT

Bankruptcy in America is rising at alarming rates. More and more people are unable to pay off their debts. The US Congress has passed legislation to deal with the issue and now it is harder to qualify for bankruptcy in America.

If you are contemplating about filing for bankruptcy, the best decision that you can make is hiring a bankruptcy law firm in Ogden UT.

Types of Bankruptcy

Chapter 7 Bankruptcy Law

Chapter 7 Bankruptcy is a simple and most effective way to resolve debts. This is the most common form of bankruptcy in America. It can give you a new beginning by removing debts quickly and at a lower cost.

Asset liquidation is at the forefront in this situation where a trustee is appointed for liquidation of nonexempt assets to pay creditors. The remaining debt is discharged once all proceeds have been exhausted.

To become eligible for chapter 7, the debtor must have no chapter 7 discharged 8 years prior to the current filing plus you must pass a means test.

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Chapter 13 Bankruptcy Law

Chapter 13 Bankruptcy, on the other hand, is often filed to stop a foreclosure or repossession. It can give you the power to reorganize your debts, repay Child support, bring mortgage and repay non-dischargeable IRS debts.

Also known as a wage earner’s plan, chapter 13 gives debtors with stable income the ability to make a plan for repayment of debts.

You come up with a proposal to pay creditors in installments for the next 3 to 5 years.

If you want to save your home from foreclosure, filing a chapter 13 can solve your problem.

You are eligible for chapter 13 as long as your unsecured debts are lower than $394,725 and secured debts are less than $1,184,200.

Do I really need a bankruptcy law firm?

You want to file for bankruptcy but you are thinking about the added cost you would incur when you hire a lawyer. You may ask yourself, How can I hire a lawyer when I am already broke? 

Chapter 7 may give you a better chance of filling your case and completing it without the need for a bankruptcy law firm as long as the following conditions are present: 

  • You have little or no property at all
  • Your income is below your state’s median income level
  • Your creditors may not dispute a debt

Take note that a simple Chapter 7 filing will require time and research on your end. You must fill out several bankruptcy forms accurately, learn how the laws work and discover your state’s exemptions.

If a company files for bankruptcy, it can’t represent itself so hiring a bankruptcy law firm is mandatory in this case.

Chapter 13 is complex and labor-intensive compared to chapter 7. You need to have legal knowledge when proposing a feasible repayment plan. Motions need to be filed if you plan on paying lower rates on your house or car or get rid of a second mortgage from your home. 

If you are not confident in navigating the whole bankruptcy process, hiring a lawyer is a good idea.

You can get help from a pro bono attorney or from a legal aid society. If the budget is still a problem, you can proceed by paying the majority of your attorney fees by a chapter 13 repayment plan.

What happens when you file for bankruptcy?

Once you file a Chapter 7 or Chapter 13, you should know what to expect when the legal process begins. There are both positive and negative outcomes when you decide to file for bankruptcy.

Automatic Stay

A positive aspect of filing for bankruptcy is the automatic stay. When a case is filed in court, the debtor is protected from creditors seeking to collect on a debt. 

Creditors can’t call you or send notices in the mail. This remains in effect until the court decides which debts are wiped clean and which should be honored.

In some cases, however, the automatic stay may be lifted when divorce proceedings get in the way or when the value of the property is less than the debt owed.

Personal Discharge

Once bankruptcy is declared, the court gives a permanent order that prevents creditors from collecting debts from you previously as long as you live.

A common example of a debt that courts discharge is credit card debt. Courts know that credit card companies can take the hit when they forgive debts.

Some exceptions include child support, alimony and your latest tax liability. These debts are deemed important to simply discharge.

A discharge does not apply to real estate property, you may still get foreclosure if you default on your loan.

Privacy

A negative consequence of filing for bankruptcy is the loss of privacy regarding your personal financial information.

Anyone can have access to your financials like how much debt you owe and who you owe.

Sensitive information will still be kept private like your social security and taxpayer identification numbers. If minors are involved they will only be listed using their initials.

Credit Score

Credit scores will automatically dip when you file for bankruptcy. Credit history will also remain even if the debt itself is discharged by the courts.

Expect to have a hard time borrowing because lenders will take note and tag you as a risky borrower.

You should accept higher interest on loans or the possibility that you won’t qualify for them at all.

This may be a valid concern but keep in mind that you can slowly rebuild your credit rating after filing.

Bankruptcy may lower your credit score but you have also prevented your debts from getting bigger. 

Hiring a Bankruptcy Law Firm is still the best decision when filing for bankruptcy.

Being broke is stressful in itself, don’t add more stress by trying to file a bankruptcy case on your own.

The best decision is to leave the job to the professionals. If you want to know more about one of the best Bankruptcy Law Firms in Ogden Ut, Godfrey Law can help you out.

You can count on their 35 years of experience in filing Chapter 7 and 13 bankruptcies.