What is Bankruptcy?
Bankruptcy a legal proceeding that allows an individual who cannot pay his or her bills can get a fresh financial start. The right to file for bankruptcy is provided in the Federal Bankruptcy Law, and all bankruptcy cases are prosecuted in Federal Court. The filing of a bankruptcy petition immediately stops all creditors from seeking to collect debts while the Court accesses your financial situation and determines if bankruptcy relief may be granted in your case.
Bankruptcy law is federal law, which provides that individuals and businesses unable to pay their debts may petition the bankruptcy court for relief. Depending on the circumstances, bankruptcy law permits debtors to either obtain a fresh start through “liquidation,” or to restructure payments to creditors through a payment plan – known as “rehabilitation.” Bankruptcy law is also meant to ensure fair treatment for creditors. Although it is not very common, creditors can sometimes force a debtor into an “involuntary” bankruptcy.
Bankruptcy is a way for people or businesses who owe more money than they can pay right now, (“debtors”), to either work out a plan to repay the money over time in a chapter 11, chapter 12, or chapter13 case, or wipe out (“discharge”) most of their bills in a chapter 7 case. While either the debtor is working out a plan or the trustee is gathering the available assets to sell, the Bankruptcy Code provides that creditors must stop all collection efforts against the debtor. Upon filing the bankruptcy petition, you are immediately protected from your creditors. What chapter you choose to file under, what bills can be eliminated, how long payments can be stretched out, what possessions you can keep, and other details are controlled by the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure. These are federal laws, which means they apply all over the United States. The Code and Rules are found in Title 11 of the United States Code. The various sections of the Bankruptcy Code are r
Bankruptcy is a system of federal laws created by Congress to reduce or cancel debts and give you a fresh start. For the average consumer, there are two basic types of bankruptcy a chapter 7 straight bankruptcy and the chapter 13 personal reorganization. The laws that apply to each are complex and require an attorney to explain their effect properly. As a general rule, chapter 7 bankruptcy eliminates most debts such as medical bills, credit card balances and unsecured loans completely. If you keep your car or house and you still owe money, those obligations will still be owed and if you want to keep those assets, you will have to continue to make those payments. Provided those payments are manageable, chapter 7 will provide you with substantial relief. For some people, managing those payments without reducing them remains a difficult task. In those cases, chapter 13 is a better option. With a chapter 13, you can adjust the payments on secured loans, reduce interest rates and reduce bal
There are two basic types of bankruptcy. The most common are the Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. The are other types of Bankruptcy include Chapter 11, Chapter 12 and Chapter 9; they are similar but are specific to businesses, farms and individual or families The main goal under any filing in bankruptcy is to give one who is burdened with debt a fresh start. A Chapter 7 Bankruptcy is the most common form of bankruptcy filing, accounting for over 65% of all Consumer Bankruptcy filings. Bankruptcy can provide much needed relief from looming credit card debt, high medical bills, old forgotten debt and any other unsecured debt you may have. Immediately upon filing, the petition creditors must leave you alone and wait in line with any other interested creditors. Bankruptcy not only prevents creditors from “self-help to your dollars”, but can also wipe your slate clean.
