In this article, you can discover:
- Effective strategies to afford a bankruptcy attorney despite existing debt, including payment plans.
- The limitations in prioritizing debts during bankruptcy.
- Key considerations before paying creditors when you are planning for bankruptcy.
How Can I Afford To Hire A Bankruptcy Attorney If I Am Already In A Lot Of Debt?
Affording a bankruptcy attorney while already in debt is a concern for many. Law firms vary in their payment structures. Some firms might not offer payment plans and require upfront payment, which could be sourced from money saved up(some clients use the money they would have paid to credit card companies) tax refunds, or loans.
However, not everyone can pay a lump sum. To address this, some attorneys, including myself, offer payment plans where the case can be filed and attorney fees paid afterward, in a manner agreeable to both the court and the client. It’s important to explore options and find attorneys willing to work within your financial constraints.
Should I Prioritize Certain Debts Or Expenses When Planning For Bankruptcy?
In bankruptcy, prioritizing debts is limited. Secured debts, like car loans or mortgages, can be prioritized as they don’t get eliminated in bankruptcy. Keeping up with these payments can simplify the bankruptcy process.
Unsecured debts, like credit card debts, are typically not prioritizable since they will be addressed through the bankruptcy. Focusing on maintaining payments for secured debts, like a house or car, is often the most strategic approach.
Should I Pay Any Creditors Before Filing For Bankruptcy?
Once the decision to file for bankruptcy is made, it’s generally advised not to pay creditors. Payments made at this stage don’t benefit the bankruptcy case and might, in certain situations, complicate it.
The funds could be more effectively used elsewhere. There are exceptions, but these are specific and should be discussed with an attorney.
Will I Be Able To Open A New Bank Account During Or After A Bankruptcy?
Opening a new bank account during or after bankruptcy is usually possible. Clients have reported being able to open accounts even while bankruptcy proceedings are ongoing, and definitely after the case closure.
Will The Bankruptcy Trustee Appointed To My Case Look At My Bank Account After I Have Filed For Bankruptcy?
Yes, bankruptcy trustees typically review the last 90 to 180 days of transactions in all bank accounts after filing for bankruptcy. This is a standard part of the process.
Will The Trustee Continue To Monitor Any New Bank Accounts Or Credit Card Accounts That I May Open During The Bankruptcy?
Post-petition financial activities, such as opening new bank accounts or obtaining loans, are generally not a concern for the trustee unless there are specific reasons to investigate further. The trustee’s focus is usually on the financial history leading up to the bankruptcy filing, rather than activities after filing, unless they relate to the investigation of the case.
Is There A Bank Account Exemption In A Bankruptcy Code?
Bank account exemptions in bankruptcy codes vary by state. While specific ‘bank account exemptions’ may not be directly stated, there are exemptions related to wages and social security benefits, which may impact the funds in bank accounts. It’s important to note that these exemptions and their applicability can differ significantly between states.
For instance, in Florida, there are exemptions for wages and disposable earnings, but not explicitly for bank accounts. Each state may have its own unique set of rules regarding exemptions in bankruptcy cases.
For more information on Financial Management In A Bankruptcy Case, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (407) 305-5599 today.
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