The Added Value A Lawyer Offers in a Personal Bankruptcy
Personal bankruptcy is only an option for consumers. Reasons for bankruptcy are impending or already occurring insolvency. This means that the consumer can no longer cover the debts accumulated in the past with his assets.
Debts have often been pressing for a long time and are making life increasingly difficult. The legislator has made going into personal bankruptcy much more attractive as of January 1, 2022 by shortening the good behavior phase from six to three years.
Experience has shown that the situation for those affected in the context of insolvency is emotionally exhausting. In addition, they are not familiar with the complex insolvency law. A bankruptcy attorney can help here, especially if his main focus is insolvency law. You can tell whether this is the case, for example, by whether the lawyer of your choice has the additional qualification as a specialist lawyer for insolvency law.
The essentials in a nutshell
- Especially in the context of insolvency, a legal assessment should always be carried out by a lawyer experienced in insolvency law
- The sooner you go to the lawyer, the greater the scope for a sustainable solution to the economic problems
- The additional qualification “Specialist Lawyer for Insolvency Law” is evidence of in-depth theoretical and practical knowledge of insolvency law
- The cost of legal advice is offset many times over by the benefits
- Only a lawyer may provide legal advice and can therefore provide more comprehensive advice than classic debt advice
A suitably qualified lawyer can help you settle your debt. It does not necessarily have to be a personal bankruptcy. Should this nevertheless be the case, the lawyer can prepare you comprehensively and give you valuable legal tips.
In return for debt counseling, a lawyer is also able to give you comprehensive legal advice. In principle, legal advice may only be given by lawyers. The advice is therefore not limited to just one area of law, such as insolvency law. If you’re based in Texas and facing insolvency issues, consulting with a reputable Houston Debt Lawyer can provide invaluable local insights tailored to your situation.
Important
In general, the earlier the debtor seeks advice, the greater the scope for a sensible solution to his problem.
If the debtor is still at the beginning of the financial difficulties, a haircut can often be achieved through an out-of-court negotiated solution with one or more creditors.
According to insolvency law, the debtor is subject to certain obligations during the good conduct phase, such as the assignment of part of his income. In return, he then has the chance of being discharged of his residual debt.
This is important, because without a discharge of residual debt, the debts will continue to exist even after personal bankruptcy has been completed! Moreover, the Law on the Stabilization and Restructuring Framework has offered companies sensible restructuring tools that can be used outside of insolvency. The only condition is that the company is only threatened with insolvency.
Insolvency law also provides for the possibility of restructuring a company under self-administration or as part of protective shield proceedings.
Regular questions about insolvency
How much does a bankruptcy attorney cost?
How high the costs for a lawyer specializing in insolvency law are depends on the joint agreement. In principle, the costs can be regulated in a fee agreement. Alternatively, an agreement on billing according to the Lawyers’ Compensation Act can be used.
Is advice from a lawyer in bankruptcy law mandatory?
Advice from a lawyer, or even better a specialist lawyer for insolvency law, is not absolutely necessary. However, insolvency law is a very complex area of law, which in many places also requires knowledge of other areas of law. Simple debt counseling may be the right address in simple consumer cases. However, this does not apply to complex issues. In addition, only a lawyer is authorized to provide comprehensive advice.
What are the advantages of personal bankruptcy?
If you have initiated personal bankruptcy and successfully completed the three-year phase of good conduct, nothing stands in the way of a discharge of residual debt. This allows you to finally and legally get rid of your old debts. To ensure that nothing is overlooked, especially when preparing the insolvency application, you should definitely seek advice from a lawyer specializing in insolvency law.
The situation with a specialist lawyer is comparable to that of a specialist doctor. Because like a doctor, a lawyer must first prove special theoretical and practical knowledge and activities before he can bear the title specialist lawyer for insolvency law.
Does labor law also apply in insolvency proceedings?
Yes, the labor law regulations also apply in the course of insolvency proceedings. In particular, an employee must have filed an action for protection against dismissal within three weeks of being dismissed. Otherwise, the termination is considered accepted. Whether an action for protection against unfair dismissal has any chance of success must be assessed by a lawyer specializing in employment law.
Note:
The lawyer specializing in insolvency law acts as a neutral advisor to his client, both inside and outside of insolvency proceedings, who only has his interests in mind.
Who can initiate insolvency proceedings?
Both debtors and creditors can file for bankruptcy over the debtor’s assets. Since the insolvency application for both corporate and private insolvency is complex and has some important special features, it should also be prepared together with a lawyer.
Note:
Due to the task assigned by law, an insolvency administrator is more likely to be seen as a representative of the interests of the creditors.
Conclusion
Insolvency law is a complex area of law and insolvency is usually a burden for the debtor. Let a specialist lawyer, ideally a specialist lawyer for insolvency law, advise you on this. After a comprehensive assessment of the individual case, he can show you the ideal way, give valuable legal tips and accompany you throughout the process. This also applies in the event of personal bankruptcy. Even filing for insolvency entails risks and fall distances that are known to an expert such as a specialist lawyer for insolvency law. Unlike debt counseling, a lawyer is also able to provide comprehensive legal advice.
