How A Bankruptcy Lawyer Can Help

Bankruptcy is more common today than it was many years ago. Every day people are finding themselves buried underneath mountains of debt and bankruptcy becomes the only way out. These reasons are why there has been an increased demand for bankruptcy lawyers over the past few years.

If you have to file bankruptcy, then we strongly recommend hiring a bankruptcy lawyer. Bankruptcy has serious long-term financial and legal consequences. These consequences can help you or hurt you depending on how your bankruptcy is structured. An experienced bankruptcy lawyer can guide you through the process and bring you out on a better financial footing. At the end of the process, you might have all your debts discharged or, at the very least, brought down to a level you can manage.

In this article, we want to give you some general information about bankruptcy law so you’re prepared when you speak to an attorney. At the end of the article, we link to our guide which lays out the specific steps to take on how to get a lawyer.

General Information on Bankruptcy Law

Before we go further, you need to know that the information in this section is only general information about bankruptcy law. It is not legal advice and it is not even specific advice. Instead, use this general information to prepare for your meeting with a bankruptcy lawyer. At the meeting, the lawyer can specifically advise you on how bankruptcy law applies to the facts of your specific situation.

Types of Bankruptcy

You might not know this, but there isn’t just one type of bankruptcy. There are multiple types organized into what are called chapters, as defined by the United States Bankruptcy Code. Ask your lawyer to explain how these different types of bankruptcy could help you in your situation. Here is a high-level overview of the different types of bankruptcy:

Chapter 7 Bankruptcy

  • Individuals and businesses can file chapter 7 bankruptcy.
  • A trustee will take almost everything an individual owns, sell it off to pay debts, and leave the individual possibly debt-free with a few assets remaining.
  • Items can be exempted from the process, including a portion of the equity in a car owned and a portion of the equity in a house owned. Federal and state laws determine which items are exempted. Talk to your attorney for advice on your specific situation.

Chapter 13 Bankruptcy

  • Only individuals can file chapter 13 bankruptcy.
  • An individual must have a steady stream of income, such as from a job.
  • During the process, debt is restructured to be paid off in 3 to 5 years.
  • Some possessions may be retained, which is a big difference from Chapter 7.

Chapter 9, 11, 12, 15 Bankruptcy

Chapters 9, 11, 12, and 15 are for entities other than individual consumers:

  • Municipalities such as cities, towns, and schools, often use chapter 9.
  • Businesses often use chapter 11, in lieu of chapter 7, to restructure.
  • Family farmers and fisherman often use chapter 12.
  • Entities filing for bankruptcy who are located in multiple countries often use chapter 15.

Benefits and Drawbacks of Bankruptcy

While bankruptcy has its benefits, it also has many drawbacks. You should ask your lawyer to explain how these can affect your specific situation.


Bankruptcy has several benefits, the most important being that it can eliminate or reduce someone’s debt. Most people can get out from underneath some or all of their debt when the process is complete.

Another benefit of bankruptcy is that it can automatically pause a foreclosure, certain pending lawsuits, and collection agencies from collecting upon someone’s debt. But filing bankruptcy doesn’t stop the collection agents from calling or sending letters. To stop these annoyances, ask your attorney about the Fair Debt Collection Practices Act which can help.


Bankruptcy does have several drawbacks. The most significant drawback is its effect on credit ratings. The existence of a prior bankruptcy can persist on a credit history for up to 12 years depending on the circumstances. Not only does bankruptcy lower a person’s credit rating, but it can also deter lenders from taking a chance on someone with a history of bankruptcy on their credit history report.

There are other drawbacks with bankruptcy. In chapter 7, the biggest drawback is the loss of almost everything of value. The court won’t take away family photos, but they may take away televisions furniture, and many other things which have a monetary value. You should talk to your attorney for advice on your specific situation.

How to Get a Bankruptcy Lawyer

If you’ve come this far, then you should have enough general information about bankruptcy law to assist a lawyer in advising you about your specific situation. Also, you should have a general idea about how a bankruptcy lawyer can help your situation.

But before you start searching for a local bankruptcy lawyer, there is one more step you should take. We highly recommend reading our guide about how to get a lawyer. In the guide, you will learn many things about how to get a lawyer. Here is an example of what you will learn:

  • How to find a lawyer experienced with bankruptcy law.
  • How to research the lawyer’s background.
  • Questions to ask before an initial consultation.
  • Questions to ask during an initial consultation.
  • Observations to record about the lawyer
  • How to decide whether to hire the bankruptcy lawyer.

Once you read this guide, you should be prepared to hire a lawyer to help with your bankruptcy needs.