Finding the Right Bankruptcy Attorney
Bankruptcy can be a scary word. However, with the right bankruptcy attorney, it may spell relief.
Filing for bankruptcy may provide a solution to debt problems and give you a fresh start. All bankruptcy proceedings are governed by the Bankruptcy Code, which classifies bankruptcy matters in different chapters depending on the type of relief being sought. The great majority of debtors who file for bankruptcy will not see the inside of a courthouse and working with a knowledgeable and experienced attorney may streamline the process.
The two most common forms of bankruptcies include filing for Chapter 7, which wipes out most debts without repayment, and Chapter 13, which accomplishes a reorganization of debt for individuals and sole proprietors.
What is a 341(a) meeting?
Those who file for bankruptcy will be required to attend a 341(a) Meeting of Creditors. The term “meeting” is an intimidating misnomer and should not deter a debtor from filing for bankruptcy. Despite its name, creditors rarely attend 341(a) meetings as there is little incentive. In addition to a creditor having to cover the costs of legal representation, creditors know that in most cases they do not stand to gain any headway by appearing as a debtor’s 341(a) hearing. Creditors understand the cost to participate in the process and realize that in most cases it is simply not worth their efforts to appear at the hearing. To a certain degree, creditors rely on the bankruptcy trustee to make sure the debtor has disclosed all material assets and accurately stated their income.
These 341(a) meetings are often held virtually by Zoom or over the phone and are usually quick and painless. One of the trustee’s objectives during a 341(a) meeting is to evaluate whether any unexempt assets are exposed and could be liquidated for the benefit of the creditors; however, a liquidation occurs in only a small percentage of cases.
In the small percentage of cases where a debtor does have an asset liquidated, the trustee stands to earn a commission. For example, in Chapter 7 Bankruptcy proceedings trustees are paid; 25% of the first $5,000 of proceeds from the liquidation of the debtor’s assets, 10% of any amount over $5,000 but less than $50,000, 5% of any amount over $50,000 but less than $1,000,000, and reasonable compensation for amounts over $1,000,000 not to exceed 3%. Unless administrative fees are waived, trustees are also compensated $60 per bankruptcy filing. In short, trustees have great incentive to liquidate as many of the debtor’s assets as possible which is why a debtor should be careful to choose the right bankruptcy attorney to minimize the chance an asset would be lost as part of the bankruptcy process.
Exemption planning involves an analysis of the debtor’s assets and application of laws to protect those assets from liquidation when filing bankruptcy. An experienced bankruptcy attorney can you help you find exemptions that may enable you to keep your assets.
For example, the Homestead Exemption allows a certain portion of equity in a homestead to be exempt from execution to satisfy a judgment. The Homestead Exception was recently amended under Assembly Bill No. 1885, which raised the amount a debtor can claim as an exemption to a maximum amount of $626,400.
The Homestead Exemption illustrates the importance of having the assistance an experienced bankruptcy attorney during a bankruptcy proceeding. The U.S. Bankruptcy Code is purposefully confusing and wrought with potential pitfalls. With legal expertise, however, debtors can reclaim their financial health.
Consulting an Experienced Bankruptcy Attorney
There are different options to consider when filing for bankruptcy. The experienced bankruptcy team at RJS LAW will help you navigate the intricacies of the bankruptcy process and help you obtain a fresh start unburdened by most types of debt. To discuss your options for filing for bankruptcy, schedule a free confidential, no-obligation consultation with the bankruptcy team at RJS LAW. Call us today at (619)-595-1655.
Published by Miles Anderson