Do I Need a Lawyer to File for Bankruptcy?

person thinking "Do I need a lawyer to file for bankruptcy"

Unless you have filed bankruptcy before, it is difficult to know if you do need a lawyer to file for bankruptcy. While you can do research online and prepare to file by yourself, the actual process can be daunting, especially when you have to meet all deadlines and attend all meetings required. This is why bankruptcy attorneys exist. It is their job to make sure that filing bankruptcy with them goes well so that you don’t have to worry about every little detail.

If you have questions about filing bankruptcy, our Los Angeles bankruptcy attorneys can answer them. We have filed different types of bankruptcy for our clients before, including chapter 7 and 13 bankruptcies, and know all anyone needs to know about bankruptcy. Call us today for a free consultation.

 

What are the Requirements for Filing Bankruptcy?

The requirements for filing bankruptcy depends on the type of bankruptcy. Generally, the court requires your financial records such as your debts, assets, income, and expenses. This information is to help you and your attorney figure out if you are eligible for bankruptcy.

 

Requirements for Filing Bankruptcy Chapter 13

Chapter 13 bankruptcy allows you to repay your debts, usually not all, over a course of three to a five-year repayment plan. Before the court approves of your plan, you must show and prove that you:

  • are up-to-date with your tax filings
  • do not have too much debt
  • are able to make the monthly payments
  • are not a business but an individual

Your bankruptcy lawyer can make sure that all documents are submitted properly to increase the chances of your petition being approved by the court.

Being Up-to-Date With Your Tax Filings

To be eligible for chapter 13 bankruptcy, you must be able to prove that you have filed your federal and state income tax returns for the previous four tax years. If you have not filed the latest tax return yet, you should do so before filing bankruptcy chapter 13. If the court finds that you have not filed your taxes for the past four years or if you cannot prove that you have filed, your chapter 13 case will be dismissed.

Your Debt Cannot Be Too High

Filing Chapter 13 bankruptcy requires that you do not owe too much money. According to the United States Courts, your unsecured debts must be less than $394,725 and your secured debts must be less than $1,184,200 (note that these amounts may change in response to changes in the consumer price index).

Secured debts are connected to a piece of property that you owe money towards. The most common examples include your home and car. If you fail to make payments towards your secured debts, you are in jeopardy of losing your property.

Unsecured debts are not connected to a piece of property. Instead, they are usually intangible such as credit card debts and medical bills.

You Must Be Able to Make Monthly Payments

Chapter 13 bankruptcy is basically a repayment plan for your debts. This means that you must be able to make payments listed under the payment plan. To be eligible for chapter 13 bankruptcy, you must be able to prove that you will be able to make the payments listed in the repayment plan. If you do not have enough disposable income to make the payments, the court will most likely disapprove of your case.

You Must Be an Individual, Not a Business

Chapter 13 bankruptcy is for individuals and not for businesses. While chapter 13 is designed to help the debtor by reorganizing their debt, it is geared towards individuals. Businesses that want to reorganize their debt can look to file Chapter 11 bankruptcy.

 

Requirements for Filing Bankruptcy Chapter 7

In contrast to chapter 13, chapter 7 bankruptcy allows debtors to repay their creditors through means of liquidation, and the process only takes a couple of months. If you have recently received a discharge from bankruptcy or have enough disposable income to make payments over a five-year repayment plan, you may not be eligible for chapter 7.

Your chapter 7 bankruptcy attorney can help you with the process by making sure if chapter 7 is the best bankruptcy option for you. The attorney can also help you avoid missing any deadlines and paperwork needed to file bankruptcy.

No Recent Discharge

You will not be eligible for chapter 7 bankruptcy if you have already received a bankruptcy discharge within the last six to eight years. If you are looking to file chapter 7, make sure that your previous discharge no longer shows on your credit.

Disposable Income

If it shows that you have enough disposable income to make monthly payments towards your creditors over a three to five year period, it is likely that your case would convert to a chapter 13 bankruptcy.

 

So Do I Need a Lawyer to File for Bankruptcy?

This is a question that you should discuss with a bankruptcy lawyer. Every case has its own unique circumstances and may favor chapter 7 bankruptcy over chapter 13 and vice versa. In general, bankruptcy attorneys are well knowledgeable about the subject matter that they can answer your questions and advise you on your options.

If you want to file bankruptcy or just have some questions, contact us today. Our experienced Los Angeles bankruptcy attorneys will take the time to understand your situation and tell you your best next steps to handle your debt situation. Call us today for your free consultation.

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