How To Protect Your Rights In Bankruptcy

Bankruptcy can be a contentious process, especially if a creditor takes exception to the situation. Under such circumstances, you need to know how to protect your rights. Here is how to make sure the system works the way it's supposed to while you seek relief.

Get a Lawyer

A bankruptcy attorney can help you to understand the process. You can describe your situation to a lawyer, and they can tell you what your rights are. If a creditor is being abusive, a law firm can help you figure out how to stop the behavior while the bankruptcy process goes forward. Typically, a judge grants an automatic stay on all collection actions once the court accepts your petition for relief. If a creditor breaks the rules, the critical thing to do is to document their offenses.

Be Thorough

The bankruptcy process is detail-oriented. A judge needs to know who your creditors are and how much you might owe. If a petitioner fails to include a creditor's name in the case, then that party can continue to pursue collection of the debt regardless of what happens during the bankruptcy. To maximize your level of legal protection, a bankruptcy lawyer will want you to be as thorough as possible.

Wait to File

If you're carrying a significant debt load, you may feel a major time crunch on filing bankruptcy. However, quick filing creates problems. If you don't submit everything, the court may reject the case entirely. You will then have to refile to have any hope of getting the court to hear the case.

Also, bankruptcy cases move fast once the paperwork gets to the judge. Even the most complex bankruptcies only take a few months. Some will conclude within weeks. There just isn't a ton of time for a bankruptcy attorney to write the brief and provide supporting documents. It is better to wait a week or two to file and be sure that you've gotten everything into the brief.

Choose the Right Type of Bankruptcy

America has two general kinds of bankruptcy. You may liquidate your assets or restructure your debts. The liquidation process involves the court selling all non-exempt assets, paying whatever's possible to your creditors, and discharging whatever isn't covered. Restructuring means creating a payment plan and agreeing to pay a reduced amount.

You need to be eligible for the type of bankruptcy you file. Talk with a bankruptcy lawyer so they can tell you what type of bankruptcy they believe you ought to pursue.