How A Personal Bankruptcy Lawyer Can Help You Erase Debt

3,728 families have filed bankruptcy using Upsolve

In a Nutshell

A personal bankruptcy lawyer can help you erase debts or you may choose to file bankruptcy on your own. Depending on the complexity of your situation and the type of bankruptcy you file, hiring a personal bankruptcy lawyer can be a great investment.

Written by the Upsolve Team.  Reviewed by Attorney Andrea Wimmer
Updated July 28, 2020


Has the coronavirus virus made your financial situation worse due to job loss or reduction in earnings? Many people are falling behind or unable to pay credit card debt based on the current economic situation. Is your car loan past due and you fear a repossession action? Has your credit score decreased due to the impact of COVID-19? This article will discuss the role of bankruptcy lawyers and why it is important to seek advice from an attorney who specializes in bankruptcy, not just any lawyer.  You will also learn how to find the right lawyer who can help you file personal bankruptcy to erase your debt.  

The Role of Bankruptcy Lawyers

You may have heard bankruptcy lawyers advertising on the radio, TV, or even seen their ads on public transportation and wondered what they actually do. If a creditor has filed a complaint against you in court, you may receive fliers from attorneys offering their help. A bankruptcy attorney gives legal advice and helps with legal issues related to your debt. They can help you file a bankruptcy petition with the court. At the end of a successful bankruptcy case, certain debts are erased, and you never have to pay them back.  

Bankruptcy attorneys can work as sole practitioners or they may be part of a law firm. There are some law firms that specialize in handling bankruptcy cases. They help their clients file for bankruptcy. However, you have the right to file a bankruptcy petition pro se – meaning without an attorney. A bankruptcy attorney gives legal advice and helps you erase the debt. They can help you file a bankruptcy petition with the court.  At the end of a successful bankruptcy case, certain debts are erased, and you never have to pay them back.  

Filing a Bankruptcy Case 

Bankruptcy cases are filed in federal district courts and not in state courts. You must complete what is known as a bankruptcy petition or paperwork listing all your creditors who will receive a notice from the bankruptcy court and have a specific amount of time to raise any objections they may have, though that is rare. Once you file your petition, there is a hearing known as the meeting of the creditors, where they can appear and ask questions about your financial situation and your paperwork.  

There are two types of bankruptcies for individual consumers. One is known as Chapter 7, which is sometimes called straight liquidation where you can erase your debts without entering into payment plans with your creditors. When your debts far exceed your income or wages, consumers typically file Chapter 7 because they know they cannot repay the debts. People who have lost their job or have unexpected medical bills from an accident or illness like coronavirus are able to get quick relief through Chapter 7 bankruptcy.   

The other type of personal bankruptcy is Chapter 13, which is also known as a “wage earner’s plan.” In a Chapter 13 bankruptcy plan, you agree to pay your creditors as much as you can without hardship over five (5) years or 60 months. The bankruptcy trustee will review your forms to make sure you're committing all of your  disposable income or disposable earnings to your repayment plan. Once the terms of the plan have been completed, a Chapter 13 discharge eliminates the rest of the filer’s unsecured debt. In both Chapter 7 and Chapter 13 bankruptcy, as soon as your file petition, you are granted an automatic stay. This means your creditors are automatically stopped from taking certain actions like filing a lawsuit to collect monies owed, foreclosing on your home, repossessing your car, or starting or continuing a wage garnishment.     

Dealing with the Trustee

You can think of the bankruptcy process as being similar to financial planning. You go to a financial planner to assist with getting your finances in order. Similarly, in a bankruptcy case, there is a person known as the trustee who reviews your finances to determine if you have any unprotected property that can be sold to pay your creditors. The trustee will look at your property to review whether any of it is not exempt. Exempt property is protected from creditors. The other type of property is nonexempt property. These are things that are not essential for you to maintain your home like a luxury car, stocks, bonds, rental property, vacation homes, jewelry, and artwork. 

Similar to having two types of property in a bankruptcy case, there are also two types of debts.  They are dischargeable versus non-discharge debts. Some common dischargeable debts are credit cards, medical debt, personal loans, and retail store card debts. Common non-dischargeable debts are generally student loans, recent tax debts, and domestic support obligations like child support and alimony. It is very important to understand which type of debts you have to determine if bankruptcy is right for you.  If you have mostly non-dischargeable debts like student loans, filing for bankruptcy may not be the right debt relief solution for you. A bankruptcy lawyer can help you understand how your debts would be treated in a bankruptcy filing.

Hiring a Bankruptcy Lawyer

If you decide to hire a bankruptcy lawyer, there will be the attorney’s fees for reviewing your financial situation, completing and filing your petition, attending your 341 meeting, and monitoring your bankruptcy case until the bankruptcy discharge is entered. There is also a  court filing fee to file your Chapter 7 or Chapter 13 petition. A Chapter 13 case usually covers five years so the attorney fees can run into thousands of dollars, though a lot of debt is paid through the Chapter 13 payment plan after the bankruptcy case has been filed. 

However, for a Chapter 7 bankruptcy case, the attorney fees must be paid in advance of filing your petition. Otherwise, the discharge eliminates that debt as well. Thus, they will require you to pay the attorney fees before they file your Chapter 7 case. 

Bankruptcy is a Highly Specialized Area of Law 

It is wise to choose a lawyer who has experience in this area. A lawyer who specializes in bankruptcy law may be a member of the National Association of Consumer Bankruptcy Attorneys (NACBA) where they meet with other bankruptcy lawyers nationwide and stay up-to-date on bankruptcy laws and regulations. One of the main missions of this type of voluntary Bar Association is to press for legislation in the United States Congress that strengthens the rights and protections of consumers who file for bankruptcy. NACBA was instrumental in legislative efforts that made changes in the Bankruptcy Code that benefit consumers. These changes are part of the Bankruptcy Reform Act of 1994. 

Finding the Right Bankruptcy Lawyer

Just like going to the right doctor, when you are seeking legal aid with filing for bankruptcy, you want to go to the right bankruptcy lawyer. One way to do this is to contact your state’s bar association. One of the roles of the state bar association is to help people find attorneys. You can contact your state bar for a list of attorneys in your community who specialize in bankruptcy cases. There is also another resource to help you find an attorney and get a free bankruptcy evaluation option.

Conclusion

A personal bankruptcy lawyer can help you erase debts or you may choose to file bankruptcy on your own. Depending on the complexity of your bankruptcy case and the chapter you file, it may be ideal to meet with a bankruptcy attorney for a free consultation. Do know you are not alone in struggling with debt, especially during COVID-19.  So, even if you can’t afford to hire a lawyer, you may be able to use our free online web app to help you through the process.



About the authors
The Upsolve Team

Upsolve is lucky to have an incredible team of finance and consumer rights professionals as contributing writers to help us keep our content up to date, informative, and helpful for everyone.

Attorney Andrea Wimmer

Andrea practiced exclusively as debtors’ counsel in consumer chapter 7 and 13 cases for more than 10 years before joining Upsolve, first as a contributing writer and editor and ultimately joining the team full time in August 2019. While in private practice, Andrea handled all ban... read more

It's easy to get help

Choose one of the options below to get assistance with your bankruptcy:

Free Web App

Take our bankruptcy screener to see if you're a fit for Upsolve's free web app!

Take Screener
3728 families have filed with Upsolve! ☆
OR

Private Attorney

Get a free bankruptcy evaluation from an independent law firm.

Find Attorney
3299 people found attorneys this month

Questions about bankruptcy?

Research and understand your options with our articles and guides.

Go to Learning Center →
Already an Upsolve user?

Read Support Articles →

Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can’t access their basic rights when they can’t afford to pay for help. Combining direct services and advocacy, we’re fighting this injustice.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.

Close

Considering Bankruptcy?

Try our 100% free tool that thousands of low-income families across the country have used to file bankruptcy themselves. We are funded by Harvard University, will never ask you for a credit card, and you can stop at any time.

File Bankruptcy for Free