What's in a Bankruptcy Consultation?
A consultation with a bankruptcy attorney is the best way to get advice if your debt is getting a bit out of hand. There a number of factors that a bankruptcy attorney will review with you, before making their recommendation of which chapter of bankruptcy to file. Typically there are three main topics that an experienced bankruptcy attorney will review with you before offering their advice: 1) Assets; 2)Income; 3)Liabilities (your debt).
Do you have Assets?
By definition, an asset is property owned by a person that is regarded to have value. The assets most people have are: a home, a vehicle, bank accounts, and maybe a retirement account. Even your right to sue someone can be considered an asset. Assets that have too high a value can technically be liquidated in a bankruptcy case, but most of these assets can be protected.
Making Money; Your Income.
When we talk about income, most people assume we are only talking about income from a paycheck. If you are a W-2 employee, an attorney may request your pay-stubs to run a “Means Test” analysis. We will discuss the role of the Means Test in bankruptcy case in later posts. Income is not only money you earn from an employer, but also family support, disability, royalties, etc. Even your Etsy store “side-hustle” needs to be disclosed whether or not it has turned a profit.
Liabilities; Your Debt.
Most people want to file for a bankruptcy to wipe out their debt and get a fresh start. A Chapter 7 bankruptcy can do that, but not all debt is treated equally. Even with a chapter 7 bankruptcy, some debt cannot be discharged according to the bankruptcy code. Credit cards, personal loans, and past-due medical bills are some of the types of the general unsecured debts that are dischargeable. However, there are priority debts like alimony, child support, and some taxes that are not dischargeable.
Every person’s financial situation is different. There are no “cookie cutter” type cases out there. An attorney will go over these areas, and more, to thoroughly advise you of your options. Filing a bankruptcy can be a daunting task, don’t do it alone.