What is the Job of a Bankruptcy Lawyer?
Bankruptcy is a financial situation where either an individual or a corporation finds themselves in a position where their finances can no longer support their lives, businesses, or the repayment of their loans. A bankruptcy lawyer works either for the person, or group experiencing the debt, in an effort to guide them out from the bankrupt status, or for the creditors, that is, the people the debtors owe money to.
Whenever there is an economic crisis, or even without, people generally face problems with their financial assets. It is the job of a bankruptcy lawyer to figure out a way whereby a person in debt can break free from bankruptcy. They can counsel, represent, assist, or guide the client away from bankruptcy.
What Does a Bankruptcy Lawyer Do?
Bankruptcy proceedings are conducted in court. A bankruptcy lawyer can represent either the debtor or creditor in a court of law, wherein their main task is to ensure both parties leave the situation with their finances secure. In court cases related to bankruptcy and bankruptcy law, the ideal outcome is a situation where both the debtor and the creditor win in the situation.
If the sector continues to face debt, then both they suffer and their creditor as they cannot pay that creditor back the sum they are owed. Similarly, the creditor cannot ask the debtor to pay an amount that they do not possess, even if the creditor is legally owed that sum. By virtue of declaring bankruptcy, the debtor makes it clear that they are no longer in a financial situation where they can repay their creditor.
A bankruptcy lawyer can file motions related to debt and bankruptcy, represent their client in court proceedings, and present plans related to reorganizing debt in an effort to either guide their client out from bankruptcy, or ensure that their client is paying to amount they are owed by the person that declared bankruptcy. A bankruptcy lawyer can also help an individual or organization to go ahead with declaring bankruptcy.
What Kind of a Role Does a Bankruptcy Lawyer Play in Resolving Situations Related to Bankruptcy?
Bankruptcy laws have been in place as early as the 1800s, though formal laws and court proceedings as seen today were not established until 1898. in 1841 and 1867, two Acts were passed that had to do with bankruptcy. Finally, in 1898, the Bankruptcy Act, also known as the Nelson Act, was passed. This Act laid the foundations of the modern relationship between debtors and creditors in the context of bankruptcy.
A bankruptcy lawyer must have a Juris doctorate as well as a valid attorney badge if they want to practice this branch of law. While there are differences in how various States approach cases related to bankruptcy, the federal bankruptcy laws offer a more standardized solution to such fiscal problems.
Known as the U.S. Bankruptcy Code, these laws clearly define various rules and regulations pertaining to the bankruptcy of various kinds. The three most prominent and common kinds of situations related to bankruptcy include:
- Individual Petitions: The details of how such a petition should be addressed and dealt with under federal law is outlined under Chapter 7 of the Code.
- Petitions by Businesses: bankruptcy regulations specifically related to corporations, organizations, and committees are found under Chapter 11 of the Code.
- Petitions by Wage Earners: A person classified as a wage earner typically gets more time than individuals or organizations when it comes to paying back their debt. Specific rules related to bankruptcy in this category are found in Chapter 13 of the Code.
A bankruptcy lawyer can work in and out of courts, filing motions and initiating court proceedings that seek to eliminate the debt of their clients.