Bankruptcy Attorney Suggestions for Clients
A bankruptcy attorney is the professional who is usually consulted when a person is in on his head with debts and in a financial crisis. His role in his client’s life when he is hired is to explain things to the client. It is important that the client understand what is at stake with the many different options that are before him. The lawyer should be able to differentiate the kinds of chapters that are involved with a bankrupt state. It is not just the kinds of bankruptcies that need to be explained but what follows after the declaration.
This type of financial solution is focused on helping both the individual and a company or firm that is in dire financial straits. The bankruptcy attorney will explain what kind of solution this is to his client. The Chapter 7 is the straight kind of solution in which assets and properties of the person or company in debt will be liquidated to pay off its debts. For businesses, the liquidation may mean entire aspects of the firm being sold off to others. This does not mean that the business will be closed or folded because the sale of just some of the divisions may be able to secure the loan that they owe. For individuals, the same liquidation process is implemented by the judge through a Trustee who takes charge of the proceeds of the sale in order to immediately pay back the people whom the individual owes money. The people to whom the person owes money should register with the court in order for the court to facilitate their payment as soon as the liquidation process is finished. The filing of the case will also stop the collectors from harassing the individual.
The Chapter 13 form of solution reinvents the debts of the individual in such a way that he enters a program where his projected monthly income is allocated to pay off his debts. The bankruptcy attorney can recommend this kind of solution for individuals who are in on their heads with debts but still have resources and the income to pay these off. Once the lawyer files this kind of case with the court and it passes muster, the individual and his lifestyle and income will undergo a rehabilitation in such a way that his income will be made to accommodate paying off his debts. The individual will submit himself to the court in order to put a stay on his collectors to stop collecting until a program is defined and payment can be arranged. The process entails that the individual continue working or earning income in order to pay off the debts that he owes.
These are two of the more common solutions that a bankruptcy attorney may suggest to his clients. These are also two of the simpler ones which mean that the client will readily understand these and will know what to do when the case is filed and approved by the court.