Bankruptcy And Debt



States for Bankruptcy And Debt

Bankruptcy And Debt

Bankruptcy and Debt Law:
As the global economy continues on its journey downhill, it is becoming increasingly difficult for average, everyday Americans to make ends meet. Millions of people are forced to borrow money in order to improve their standard of living, but with the nation’s economy stuck in a rut, it is becoming increasingly difficult to keep up with payments and maintain a decent lifestyle. Bankruptcy is the legal declaration that you, or an organization you own or represent is unable to pay its debts. Bankruptcy and debt law is designed to give debtors a “fresh start” by relieving them of outstanding payments. This law is tailored to meet specific situations under six “chapters”. It does not, however, grant a person complete freedom from financial responsibilities, including child support, taxes, secure debts and other outstanding debts not listed on a bankruptcy petition.
 
Types of Bankruptcy and Debt:
Bankruptcy and Debt law describes the types of bankruptcy in six chapters. Chapter 7 bankruptcy involves “liquidation” or selling off a debtor’s property and other assets. Under this chapter, a trustee is designated to take over a debtor’s estate except certain exempt property, and use it to obtain cash which is then distributed among the creditors. Cases where there is no non-exempt property and a debtor’s assets are not liquidated are known as “no-asset cases”. In these cases, a debtor may be free from liability for certain dischargeable debts. Chapter 13 bankruptcy applies to people who have a steady source of income. This type of bankruptcy allows the debtor to create a proposal to repay debts over a three to five year period during which the debtor is immune from lawsuits and other collection actions. A court then decides the feasibility of the plan and either approves or rejects it. Chapter 12 of bankruptcy and debt law applies to family farmers and fishermen with a regular annual income, allowing them ro repay their debts under a court approved plan during a maximum period of three years. Chapter 11 bankruptcy is somewhat similar to chapter 13 and applies to commercial organizations, allowing them to operate while making payments on a court-approved plan of reorganization.  Chapter 11 allows organizations to discharge some of their debts while they restructure and downsize, allowing various companies to reduce their overall debts. Chapter 9 bankruptcy is based on similar lines, however, it may only be used by a municipality, such as a county, city, town, village, or taxing district.

Reasons to Hire a Bankruptcy and Debt Attorney
Filing for bankruptcy is a long and gruesome process involving a great amount of paperwork. Moreover, filing for bankruptcy is bound to affect your life for many years to come, so it is important to have a seasoned professional on your side. Hiring an experienced bankruptcy and debt attorney is the best way to prepare an appropriate bankruptcy plan that allows you to pay off your debts while maintaining a decent lifestyle. A bankruptcy and debt lawyer can also be of great help when it comes to dealing with creditors, meeting with bankruptcy trustees and filing a petition on your behalf.