Dayton Bankruptcy Lawyer

During the last two years, it seems like our economy has only continued to get worse.  If has gotten so bad in fact, that there is an increasing trend of people having to file for bankruptcy. 

The really sad thing about bankruptcy is that it isn’t always voluntary.  Believe it or not, your creditors can actually force you to declare bankruptcy.  They may do this in an attempt to recover the money that you owe them.  This is why you should never cut off contact with your creditors; usually, if you are willing to work with your creditors, they will not take you to court.

If you have to file for bankruptcy, you will be required to use a lawyer to assist with the proceedings.   Now, we know what you are thinking.  Why would I retain a lawyer when I can’t afford to pay my current bills?  No sane person would willingly assume more bills when they can’t pay the ones they currently have.

However, with the revision of the bankruptcy laws in October of 2005, you now are required to use a lawyer when filing bankruptcy.  While this may look like a negative (since it will cost you more), it is actually a good thing.  Since you are using a lawyer, you don’t have to navigate the numerous pitfalls that may befall you if you had to go through this process alone.

When it comes to filing bankruptcy, you will file under one of 2 bankruptcy chapters.  Now, there are more than 2 chapters of bankruptcy, but only these two are the most commonly used today.

The first one is Chapter 7 bankruptcy, which is the type of bankruptcy most people think of when they think of filing for bankruptcy.   During Chapter 7, a court appointed representative will take your assets, inventory them, and then sell them off in an attempt to raise cash.  After the sale of your assets, any remaining debts are discharged by the courts.  As a result, you are literally starting over from scratch when it comes to your finances.

The other form of bankruptcy, Chapter 13, is the one that will be recommended by your creditors.  With Chapter 13 bankruptcy, the court arranges a three year repayment plan to settle your debts.  Once the three year period is over, all remaining debts are forgiven.

Your creditors will always prefer Chapter 13 over Chapter 7 bankruptcy because Chapter 13 bankruptcy gives them the best chance of recovering some of their losses, since they will be included in the repayment plan.  With Chapter 7 bankruptcy, there is a specific order of people who get paid (starting with the government and your lawyer and ending with your creditors).  Therefore, with Chapter 7 bankruptcy, your creditors have less of a chance of getting compensated for their claims.

Before you run off to file bankruptcy, there is one more item that needs to be mentioned.  While filing for bankruptcy can absolve you of debt, it can not eliminate all of your debt.  There are two categories which simply must be paid.

The first category is taxes.  Short of dying, there is absolutely no way for you to get out of paying your back taxes.  Just remember, the government will always get paid.  Since they own the tax and legal system, they get to make the rules.

The other category that can not be discharged is student loans.  Unfortunately, this doesn’t just apply to student loans from government entities.  If you take out a student loan from a non-government entity, you will be required to pay it back, regardless of whether you file for bankruptcy.  As a result, it is very important for our young people to understand this fact.  Even if they fall on hard financial times, they are still obligated to pay these loans back.

In conclusion, we recommend you take your time when hiring a Dayton bankruptcy lawyer. While you do not want to go through the time and expense of doing so, an experienced bankruptcy lawyer will really be worth his weight in gold. If you need further information on filing for bankruptcy, please feel free to visit the Dayton Lawyer Guide.