Should You File Bankruptcy on Your Own Or Hire an Attorney?
One of the most important decisions borrowers will have to make when dealing with a financial hardship leading up to a foreclosure is whether to seek relief under the federal bankruptcy laws or not. Depending on their financial situation, discharging debts under Chapter 7 or seeking a legal payment plan under Chapter 13 may be appropriate, but few homeowners really want to damage their credit scores for nearly a decade.
But another equally important decision, one that will need to be made once homeowners have decided to file bankruptcy, is whether to do it on their own or with the help of an attorney. This choice will also largely depend on the financial ability of the borrowers to spend more money on legal help, as well as how diligently they are willing to complete the paperwork to make sure they file on their own correctly.
Hiring an attorney to file bankruptcy, either to stop foreclosure or just to get a fresh start after a financial hardship, is often recommended to debtors. The main reason to consider a lawyer is simply for homeowners to make absolutely sure they have filled out the forms in accordance with the laws and meet all other bankruptcy court requirements. These are not simple matters to comply with, and the new bankruptcy reform laws have made it even more difficult to meet all of the requirements; thus an attorney may be a good source of guidance.
The main obstacle for most borrowers, though, is the steep price bankruptcy attorneys can charge for filing. Over one thousand dollars may be necessary to hire an attorney, which may be out of the range of affordability for some homeowners, depending on how far their financial situation has fallen. In such cases, it may be a better idea for families to file bankruptcy on their own in order to avoid having to pay another large legal fee that there is no money for.
Thankfully, there are numerous resources for homeowners who decide to file for bankruptcy without the use of a lawyer, and the rise of the internet and self-help books have provided even more assistance. All of the forms required to file are located online at the US Courts website, and many of the information is self-explanatory. But even for the more ambiguous requirements, online searches can provide simple explanations of how to fill out each form correctly.
Also, because the laws vary from state to state, and some courts have their own extra local forms, which homeowners can typically look up and download online, or find the contact info of the court to request copies. If help is required with these forms, the district bankruptcy court can assist borrowers in filling them our correctly and putting the paperwork in the correct order.
Filing bankruptcy, even though it should be considered a business decision and not a moral one, is almost never an easy choice for homeowners. Admitting financial defeat is anathema in America, and the costs can be steep for filing with an attorney. On the positive side, however, homeowners now have more tools than ever for filing on their own and making sure their finances are protected after a hardship, giving them the best opportunities to make a fresh start after foreclosure or bankruptcy.