Finding the right bankruptcy attorney to file your case is an important process. You have to feel comfortable with your lawyer because it is critical that you make full disclosure of all of your assets, liabilities and financial transactions over the past few years in order for your representative to best assist you.
It is vital that the attorney you have to file your consumer or small business case is knowledgeable in both Chapter 7 as well as Chapter 13. Often times, a person is eligible to file a Chapter 7 bankruptcy because they pass the Means Test but it is still more beneficial to them to file a Chapter 13 case instead.
For example, if a debtor has a great deal of credit card debt and they pass the Means Test than typically it is advisable for them to file a Chapter 7 bankruptcy because that Chapter is quicker, easier, and cheaper to file. However, if that same debtor also has IRS debt, is three payments behind on their mortgage or is facing repossession of a vehicle then they need to file a Chapter 13 bankruptcy instead. The credit card debt will be discharged in the Chapter 13 just like it would have been in the Chapter 7. However, that debtor could pay back the IRS over the 5 year Plan at zero percent interest and penalty free. Also, the arrears on the mortgage could be paid through the Plan and the debt on the car could be reorganized to avoid repossession.
When a petition is filed in Bankruptcy Court for protection from creditors, the automatic stay goes into effect. From that point on, the creditors can take no further action against the debtor without first getting permission from the Court. Often times, filing the petition is also the first step towards the rehabilitation of the debtor’s credit score.