What is Bankruptcy?
Bankruptcy is a legal process designed to eliminate most or all debt and give you a fresh start financially. There are many different types of bankruptcy — such as Chapter 7 and Chapter 13 — and each addresses different situations. An attorney can help you determine the type for which you qualify and would best meet your goals. About 90% of consumers that have unsecured debt file for Chapter 7 bankruptcy, also known as liquidation. Chapter 13 bankruptcy, sometimes called reorganization, is used in more limited circumstances such as if you have significant secured assets, such as a home or car, for which you are behind in payment or if your income level is too high to qualify for Chapter 7.
Bankruptcy is a legal process performed under the Bankruptcy and Insolvency Act. Because of your inability to pay your debts, you assign all of your assets, except those exempt by law, to a licensed trustee in bankruptcy. This process relieves you of most debts, and legal proceedings against you by creditors should stop.
Bankruptcy is the legal process for dealing with personal or business debt. Bankruptcy is a proceeding in Federal Court that beings with the filing of a petition that discloses an individual or company assets and debts. At the conclusion of the case some or all of the debts are “discharged” or erased.
Bankruptcy laws have been in existence for more than 400 years. Originally, the laws were designed only for the benefit of creditors so that they could more easily get paid and get a debtor’s property. Uncooperative debtors were put in prison or had their ears cut off. If the debtors were lucky, they would escape with only having their ear nailed to a post (while still attached to the body, of course) in a public place. Today, bankruptcy laws protect both creditors and debtors and are much more “debtor friendly.” Bankruptcy laws today in the United States are federal laws which allow debtors to reduce or cancel a debt and to obtain a fresh start without the fear of being constantly harassed by creditors. There is no specific amount of debt required to file a bankruptcy. No one will ask you why you are filing. With minor exceptions discussed elsewhere, you get to choose which creditors you will pay and which you will not pay.
Bankruptcy is the legal method for a debtor to discharge or relieve debt. Bankruptcy is a way for people or a business that owe more money than they can pay to either work out a plan to repay the money over time or to have their debt wiped out. While no debtor is guaranteed a total discharge, most debtors who file for bankruptcy are given such relief. One of the primary purposes of the bankruptcy act is to relieve the honest debtor from the weight of oppressive indebtedness and to provide the debtor with a fresh start. Title 11 of the United States Code regulates the filing of a bankruptcy. If the debtor initiates the bankruptcy it is called a voluntary bankruptcy. If the creditor initiates the bankruptcy it is called an involuntary bankruptcy. In an involuntary bankruptcy the debtor has the opportunity to contest the petition. While the debtor is either working out a plan or the trustee is gathering the available assets to sell, the Bankruptcy Code provides that creditors must stop al
