What can filing for bankruptcy do for you?
If you are in debt and want to consider filing for bankruptcy, you might have a lot of reservations about the process. Declaring bankruptcy does not have to be an overwhelming task as some debtors turn to bankruptcy attorneys for legal advice about what chapter to file and other related concerns.
Many debtor may wonder how bankruptcy actually works and how it can relieve your debts.
What is bankruptcy?
Bankruptcy is a process that enables debtors to help take care of their financial crises. The bankruptcy may help someone to get liquidate all of their debts or only a portion of it depending on the chapter that is filed. Often, the bankruptcy will remain on your file for up to ten years.
Bankruptcy also falls under federal law. If your state law and federal law are not in accordance, then the federal law will take precedence.
The types of bankruptcy chapters to file
There may be several bankruptcy chapter available to you.
Chapter 7 bankruptcy
One chapter of bankruptcy is called the chapter 7. This chapter is generally the most frequently filed out of all of the chapters. In this chapter, it is possible for you to get all of your debts completely liquidated.
This chapter may be available to individuals, couples, business partners and corporations.
Chapter 11 bankruptcy
Another chapter of bankruptcy is the chapter 11. In this form, the chapter may help business owners to manage their debts. The debtors claims may be paid off entirely or partially depending on the reorganization structure. This reorganization plan may help the debtor to function more efficiently with his or her debts.
Chapter 12 bankruptcy
This is possibly one of the more simpler forms of bankruptcy. It generally enables farmers to relieve their debts so long as it meets certain restrictions.
Chapter 13 bankruptcy
A chapter 13 bankruptcy allows for individauls or couples to generate a repayment plan to take care of their debts. However, it i likely that the debts must meet a certain statutory amount before qualifying for this chapter. This chapter may also provide a projected 3-5 year repayment plan that will take care of all or some of the debts listed.
A bankruptcy estate might involve the equity the debtor has from the start of the case. You may be able to request exemptions from certain properties, however, the remaining balance may be cleared in a chapter 7 bankruptcy. This is possible so that this money may be directed towards the costs of the bankruptcy as a whole as well as the creditor claims.
In most cases, bankruptcy approvals must be decided through court proceedings. Also, any agreements made during the bankruptcy filing may more than likely be binding to all parties involved. This might be one good reason that debtors will hire a bankrupty lawyer to help them with their case and to make sure that you may habe a better chance of your bankruptcy file being discharged.