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Posted by: Maricopa Lawyers on Sep 19, 2016

While everyone knows what filing for bankruptcy is, very few people fully understand what filing for bankruptcy really means. The basic definition is when an individual or business find themselves unable to pay their debts, they will liquidate assets in order to pay back debtors and/or formulate a structured repayment program going forward.

bankruptcy-judgmentIt might seem like, during times of financial hardship, that hiring an attorney is the last thing you would want to do, but there are a number of very valid reasons for not facing a bankruptcy filing yourself.

  • First and foremost is legal experience. The legal system is immensely complicated, and bankruptcy is certainly not an exception to the rule. There are myriad tips and tricks to understand, pitfalls to avoid, statutory filing requirements to adhere to, and rules to follow. It is certainly possible for an individual to file for bankruptcy themselves, but a solid understanding of both federal and state laws is required, and even the smallest mistake in the paperwork can stop a filing dead in its tracks.
  • Second is malpractice insurance. When it comes to insurance, it doesn’t really matter what type you’re talking about: It’s a good layer of protection/security. Having your bankruptcy filing insured is no different, and the only way to do that is to have the paperwork prepared by an attorney. Without insurance, if your filing is stopped for whatever reason, you are out the money you spent on filing, and all the time you spent waiting for the system to process you was wasted. With insurance, however, you could be entitled to compensation should any problems arise (depending on the nature of the problem).
  • Third is representation. If you were to file for bankruptcy pro se (representing yourself), then you would be responsible for attending all meetings and court proceedings, as well as communicating with all your creditors about court details, settlement offers, and all negotiations. If you were to forget to contact a certain creditor, or had difficulties getting through to the right person to talk to, then the consequences would fall squarely on your head, throwing your filing into jeopardy. An attorney would be able to handle all of the busywork for you, as well as protect you from any related negative consequences.
  • Fourth is connections and networking. If you take on filing for your own bankruptcy, you will essentially be the new kid in school, walking into a world where you don’t know anyone, and trying to navigate the halls surrounded by strangers. Attorneys have established relationships with other attorneys, various 3rd parties, clerks, judges, etc. These relationships can never be used to get you any legal advantage, but keeping your filing moving smoothly through the system can be worth its weight in gold. The last thing you want, when waiting months for financial relief, is additional waiting time thrown on top due to your case slipping through the cracks.

As you can see, there are quite a few benefits to representation during a bankruptcy filing. It’s up to you to decide whether the benefits outweigh the costs, but regardless, don’t suffer through financial stress any longer than you have to. Bankruptcy could be the light at the end of the tunnel that you’ve been waiting for.