Chapter 7, the most common form of bankruptcy and the one most people think of when filing bankruptcy, is often seen as little more than filling out a few forms. The bankruptcy court’s website has a packet of information and links to all the forms. So why do you need an attorney in a simple Chapter 7?
You could lose your house. Even if you are current on your mortgage payments you could lose your house in a bankruptcy. Most debtors don’t understand how the various state law homestead exemptions work. How you file (jointly or separately) can affect the exemption. How the house is titled can affect the exemption. If you have judgments against you and don’t avoid the judgment liens in your bankruptcy can lead to losing the house after your case is over. A good bankruptcy attorney can guide you through all the housing issues.
You could lose your tax refund. Income tax refunds are fair game for bankruptcy trustees. The timing of your filing can affect whether or how much of the refund you stand to lose. A good bankruptcy attorney understands the ins and outs of tax refunds.
You could lose your claims. If you have a personal injury or medical malpractice claim, you might end up not being able to pursue it following your bankruptcy. Your bankruptcy attorney can address those issues so you keep your claims.
Fraudulent conveyances. Some people think it’s a good idea to transfer property to a relative or friend just before filing bankruptcy so they don’t have to list that property. Usually this transfer is for little or no consideration. In other words, you don’t get anything in return for it. That’s the hallmark of a fraudulent conveyance, which could end up costing you your discharge. A bankruptcy attorney will ask about any transfers that could be considered fraudulent.
You could lose your paycheck. In Utah there is an exemption for wages that have been earned but are not paid, but once those wages are paid, no exemption exists. That means if you pick the wrong day to file, such as the day after pay day, you could lose that paycheck. A good bankruptcy attorney understands what part of your income is at risk and can tell you when to file.
Your case could be dismissed. Even if you do everything right with respect to filling out the bankruptcy forms, you aren’t home free once you file. You have a continuing obligation to cooperate with the bankruptcy trustee until your case is closed. Receiving a discharge doesn’t mean your case is closed; the trustee might keep your case open for months or even years after you received a discharge. If you don’t cooperate with the trustee, he can ask to have your discharge revoked and your case dismissed. Your bankruptcy attorney acts as the intermediary between you and the trustee as long as the case is open.
A good bankruptcy attorney does a lot more than just fill out the forms and sit with you at the 341 meeting. A good attorney will make your case go smoother than it otherwise might. If you need help with a bankruptcy, call us at (801) 413-3708 or click here.