If A Debtor Sees Bankruptcy On The Horizon, Should It Wait To Contact A Bankruptcy Attorney Or Are There Advantages To Hiring The Right Attorney Now?
As soon as you see bankruptcy looming on the horizon, you should retain counsel. There are several reasons for that. Perhaps the most important is your case may require some prebankruptcy planning. If you file an emergency case and you haven’t done that prebankruptcy planning, you may face some very serious consequences.
For example, suppose a business has an ongoing relationship with a vendor and pays that vendor $20,000 because of an antecedent debt shortly before filing a Chapter 11 bankruptcy case. That payment may constitute what is called a preferential transfer that must be undone, perhaps forever alienating the vendor. With good counsel, the business can avoid the problem by aging the transfer until it is no longer avoidable. Thus, the business should retain counsel well in advance of filing.
In a personal bankruptcy, exempting assets is particularly important. However, without careful prebankruptcy planning, in a Chapter 7 the debtor may end up losing assets, and in a Chapter 11 or Chapter 13 the debtor may have to make larger payments.
If you retain counsel right away, there may even be some nonbankruptcy solutions you can pursue, and avoid bankruptcy altogether.
Finally, you’ll need to gather information and documentation prior to filing, and that often takes a lot of time. In sum, if you have financial problems, call a good bankruptcy attorney.
For more information on Bankruptcy In California, a free initial consultation is your best next step. Get the information and legal answers you are seeking by calling (562) 777-9159 today.
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