According to United States Treasury Department figures, business bankruptcies for the last quarter of 2009 reached heights not seen since the Great Depression. Most companies filing for bankruptcy protection employ less than fifty people. The current economic meltdown has caused a financial tsunami within the core of the American economy.
The Great Recession, which is the moniker attached to the current economic slump, began when the credit bubble exploded from exotic securities trading, inflated home prices, and a record amount of debt incurred by individuals. For years, American consumers voraciously bought everything in sight on the back of a plastic card carrying double digit interest rates. The debt burden is why, that for the first time, the rate of personal bankruptcies is keeping pace with business filings. With the influx of personal bankruptcy filings, now is a good time to disseminate some tips on how to navigate the cumbersome filing process.
Do Not Panic
This means patiently exhausting all avenues for financial revival before turning to the court system for relief. Many creditors-especially during this difficult economic climate-are willing to renegotiate terms of a loan or credit line. Diligently move down that path before considering the draconian bankruptcy process. Draconian may seem too harsh a word, but bankruptcy lingers on your record for at least seven years.
Discuss your situation with a confidant
Network within your family and close friends, and find an attorney who has litigated bankruptcy cases. While not exceedingly complex, the bankruptcy process does have enough pratfalls to trip up the most astute person. You must understand the process before diving into it.
The bankruptcy process is not for the faint of heart. Once committed, you must devote most of your energy and intellectual capacity to seeing the process to fruition. Amazingly, the entire process can reach fruition within six months. However, you must hyper focus on those six months. Plan ahead to request days off from work on days when you will be required to attend a court hearing
Many attorneys offer an initial consultation at no cost to you. Utilize the free consultations, as well as resources provided by your state Bar Association. State Bar Associations provide free referral services. Ask for names of attorneys who are certified by the American Bankruptcy Institute. State Bar Associations also provide information on any complaints that have been registered against a specific attorney.
You cannot afford to be represented by someone who lacks character.
Skim through the Yellow Pages, and you will find attorneys who handle myriad of legal topics. The ideal legal candidate for you is someone who specializes in bankruptcy cases. Not only can they recite the entire process, they also have developed a network within the process that may benefit you when it comes time for a final decision.
While your attorney must be proficient with bankruptcy law, you have an obligation to provide financial records, keep abreast of court hearings, and understand the difference between Chapter 7 and Chapter 13 filings. You must know the extent of The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. For instance, the new law implements a means test that determines if someone has the resources to climb out of debt.
Ask your prospective attorney the following questions:
What certifications do you hold?
How many personal bankruptcy cases have you handled in your career?
How many cases are you currently handling? (This is a question about focus on your case)
Who will be the principal attorney on my case?
What are the first steps in the bankruptcy process?
Can you provide me with a reference?
Sit in on a bankruptcy case
A day in bankruptcy court will give you an idea of what the bankruptcy process entails. Moreover, you can watch how attorneys handle situations, which will give you a better idea of the criteria you seek in your own attorney. You may be so impressed with an attorney that you make a hire offer on the spot.
Do not wait for the threatening letters and phone calls. Do not let the onerous task in front of you preclude you from taking the initiative to seek professional legal representation. You must make a move before you receiving lien and garnishment letters.
If you are struggling with debt and burdened by burgeoning creditor demands, filing for bankruptcy may be the only way deal with your financial situation. Bankruptcy is a drastic step that requires the careful scrutinizing of potential attorney candidates.