What is Bankruptcy?
Bankruptcy is a proceeding under federal law wherein you file a petition and other bankruptcy documents with a Bankruptcy Court and you are granted a partial or complete discharge of your debts. Immediate relief in bankruptcy is provided as soon as you file for bankruptcy in the form of an order issued by the Bankruptcy Court that acts as a legal injunction against creditors proceeding against you for debt collection. At the end of the case, the Bankruptcy Court enters an order relieving you from responsibility for repaying certain debts. The final order is called a “discharge order.” What are the different types of bankruptcy? For individual debtors, there are basically two types of bankruptcy proceedings available: Chapter 7 and Chapter 13. What is Chapter 7 bankruptcy? Chapter 7 bankruptcy is most often referred to as a “fresh start bankruptcy.” In a Chapter 7 bankruptcy, you discharge all of your debts (with some exceptions) and get a fresh start. In exchange for the promise of a f
Bankruptcy is the means by which you as a debtor may relieve yourself of many kinds of oppressive unsecured debts, stop creditor harrassment, and depending upon which chapter you file under, force a repayment scheme on certain kinds of secured debts. Federal law provides bankruptcy as a way for you to get a “fresh start” in life with respect to your debts. The way is to file bankruptcy. The Bankruptcy Code (Title 11, United States Code) is designed to relieve you of burdensome debts by either eliminating most of them completely (Chapter 7) or by forcing a repayment scheme (Chapter 13 reorganization) on many kinds of creditors to help ensure that you can remain a contributing member of society. The etymology of the word “bankrupt” is interesting (but speculative). It’s believed that in times past, money brokers transacted their business on tables or benches. When they couldn’t pay their debts and became insolvent or they disappeared from the scene, their benches were broken up, or in an
Bankruptcy is the process where a person legally declares himself or his business unable to pay outstanding debts. Depending upon the type of bankruptcy filed, one meets with a judge to determine a payment schedule, or have a legal bankruptcy discharge most if not all debts. Businesses also may declare bankruptcy, which either means the business will close, or that the business will continue to operate with reduced payments to debtors. Each country has its own bankruptcy designations, but this explanation will focus on the most common types of bankruptcy in the US. Bankruptcy for the individual or the married or domestic partner couple comes in three forms, called “Chapters.” Chapter 7 bankruptcy is the most common form filed by spouses or individuals. Chapter 12 bankruptcy is restricted to people who are family farmers or fisherman. Individuals or married couples may also file Chapter 13 bankruptcy, but this is rare. For businesses, the two common forms of bankruptcy utilized are Chap
