A bankruptcy lawyer specializes in the various legal facets of the bankruptcy procedure. The client can be an individual, a business, or even a municipality. The duties of a bankruptcy lawyer include filing a petition declaring bankruptcy, writing reports, reviewing the client's assets, and attending hearings. Typically, when a client files for bankruptcy, he or she also faces additional legal issues connected to their financial situation, such as home foreclosures, liens, repossessions, creditor lawsuits, and garnishment of wages. Consequently, many bankruptcy lawyers represent their clients through the bankruptcy proceedings as well as for the issues that are connected to it.
A bankruptcy lawyer works with a trustee to ensure that a client's assets are properly liquidated and then sees that the creditors are paid with those assets. Or, the lawyer may work with the Court to create a plan of reorganization and creditor payment. In many cases, a good bankruptcy lawyer can help a client prevent foreclosure on their home, stop repossession of their car, and avoid garnishment of their wages.
A bankruptcy lawyer is among the most knowledgeable and accurate sources of information regarding the bankruptcy process. Bankruptcy lawyers focus on two primary kinds of bankruptcy proceedings: Chapter 7 liquidation, and Court-approved reorganization plans under Chapters 9, 11, 12 and 13. A bankruptcy attorney will be the best person to inform a debtor under which chapter they should file and to provide the details of filing for bankruptcy under that chapter.
For example, if a bankruptcy lawyer has a client who is an individual, that client may be eligible to file for either Chapter 7 or Chapter 13 bankruptcy. A good bankruptcy attorney will highlight the differences between the two chapters and how each will affect the client's life. For example, under Chapter 7, certain assets such as vacation homes, second cars, and family heirlooms may be liquidated to pay off debtors, but there is not a repayment plan. In the alternative, under Chapter 13, the debtor continues to own his or her property, but creditors must be paid according to a Court-approved plan.
Bankruptcy lawyers may also have clients who are business entities. If a business is in financial trouble, its attorney may instruct it to file for Chapter 11 bankruptcy. Consequently, the business is allowed to maintain its current business operations, but it must repay its creditors according to a reorganization plan devised by the court.
In other cases, the bankruptcy lawyer may have a municipality, such as a city, town, village, county or school district, as a client. In those cases, the municipality can file for Chapter 9 bankruptcy and, in essence, reorganize. Lastly, some lawyers may specialize in Chapter 12 bankruptcy proceedings, reserved specifically for family farmers.
A good place to look for a bankruptcy lawyer is through a specific state’s local Bar Association website. Bankruptcy laws can vary from state to state; so it is important to find a reputable attorney or law firm that specializes in bankruptcy in the state where the debtor resides.