Bankruptcy is a situation in which a person or business is unable to meet its financial obligations. By definition, bankruptcy occurs when a debtor is unable to pay their debts on time or when the value of their assets is less than the total of their debts. In this article, we are going to explain what bankruptcy is, the types of bankruptcy, and how bankruptcy is filed.
There are various types and chapters of bankruptcy, and the best course of action for you depends on your financial situation.
Below are the different types and chapters of bankruptcy so you can make the best decision for your situation:
-Chapter 13 bankruptcy:
This type of bankruptcy is generally used by those who qualify with regular income and need to reorganize their debts. With Chapter 13, you can keep most of your assets and pay your debts with a court-approved payment plan.
-Chapter 11 bankruptcy:
This type is generally used by large companies or corporations that need to reorganize their finances. Chapter 11 allows the business to continue operating while it reorganizes.
-Chapter 12 bankruptcy:
This type of bankruptcy is designed specifically for farmers and fishermen. With Chapter 12, you can reorganize your debts and keep your assets.
-Chapter 15 bankruptcy:
This type is used when there is a dispute between a debtor and creditor in another country. Chapter 15 allows the person or company to protect their assets in the United States.
What are the steps for bankruptcy
If you think you need to file for bankruptcy, you should follow the steps below:
-Talk to a qualified attorney:
An experienced bankruptcy attorney can help you determine if bankruptcy is the best option for you and which type of bankruptcy is best suited for your situation.
-Evaluate all your options:
Make sure that bankruptcy is really the best option for you. There are other options that may be more appropriate for your situation, such as a debt settlement or repayment plan.
-Prepare all the necessary documents:
Once you have decided that bankruptcy is the best option for you, you will need to gather all the necessary documents. This includes a listing of all your debts, assets, and income.
-Submit the application:
The bankruptcy petition is filed in the federal court that has jurisdiction over your location. The application must include all the necessary documents, as well as a payment of the corresponding fees.
-Attend the creditor hearing:
Once the application is filed, you will be notified of a creditor hearing. At this hearing, you will have the opportunity to answer the creditors’ questions.
-Close your case:
Once all pending issues have been resolved, the court will close your case. If everything has gone well, you will be free of your debts.
Bankruptcy does not necessarily mean that you lose all of your assets. Depending on the type of bankruptcy you file, you may be able to keep most of your assets. However, it is important to note that bankruptcy is a very complicated process and an attorney should be consulted before making any decisions.
Choose a good bankruptcy attorney to help you make the best decision for your situation.
A bankruptcy attorney can:
-Evaluate your situation and help you choose the type of bankruptcy that best suits your needs.
-Prepare and file all necessary documents for bankruptcy.
-Attend creditor hearings with you.
-Close your case once all outstanding issues have been resolved.
Not all lawyers are the same. Be sure to choose an attorney with experience in the bankruptcy field so that they can handle your case as efficiently as possible. Schedule an appointment with us, one of our specialist lawyers will assist you and guide you through this process, the consultation is totally free.