Personal Bankruptcy
Bankruptcy is a legal procedure that individuals put into force when trapped in an impending financial crisis caused by a huge debt.
Filing for bankruptcy gives the individual the opportunity to start afresh financially. The person filing the bankruptcy is referred to as the debtor, and the person whom he/she owes the money to is called the creditor.
The decision to file for bankruptcy is an important one, and the consequences of it must be understood before it is taken. It is an extremely difficult decision to take and better left to the discernment of lawyers who have the expertise, and are aware with the nuances such cases.
What Are The Types of Personal Bankruptcy?
Essentially, there are basically two types of bankruptcy available to individuals. Even though looked at as being two types,
Chapter 7 and
Chapter 13 bankruptcy do have certain similarities. Also, there exists the option of moving from one to the other provided you fill certain prerequisites.
In a typical case where Chapter 7 bankruptcy comes into play, the debtor would be a person with very few assets and a lot of debts. In such a case anything that the debtor may own is used to pay off creditors, but unlike with Chapter 13 where certain debts are dischargeable, in Chapter 7 bankruptcy they are not. (By dischargeable one means that payment of debt can be avoided if the court grants a discharge.)
A debtor would ordinarily file a Chapter 13 bankruptcy because of any sort of arrears, for example with rent or car loan or things like that. Creditors are paid based on a plan for the future earnings of the debtor. For this to come into effect, the basic requirement is that the debtor has a regular income.
Apart from these, a third type of bankruptcy is called a Chapter 12 which is limited to family farmers. On a larger level, we can also look at Chapter 11 which deals with cases where the debt in question is a huge sum. Ordinarily, Chapter 11 debtors are companies, and the processes involved in filing the same extremely complex.
Coming back to personal bankruptcy, while with Chapter 7 bankruptcy filing there is no ceiling for debt restrictions the rules change with Chapter 13. In the latter the debtor must figure out a Best-odds budget and a Best-effort budget for the creditors.
How Do I Know When I Should File For Bankruptcy?
Your lawyer will of course be the best guide for you on that. But even better would be for you to use the evaluation tool on this website which answers this pertinent question for you. The evaluation tool scrutinizes individual cases in order to provide a customized solution. All you have to do is to fill a form that asks for details pertaining to the type of pending debts, any and all information about your assets, your income and a few personal details. At the end of this process, a reliable assessment of your case will be made which will help you answer this extremely difficult question. Expert guidance and answers to any bankruptcy related queries await you on the other end of call from our Law firm, or Sponsoring Lawyers! Click your way through it… right now!
How To File For Personal Bankruptcy?
The word ‘filing’ might suggest a straightforward process, but
filing for bankruptcy is far from that. The lengthy process of bankruptcy is usually best left to work out by lawyers. Reason might advice otherwise – after all it is an added expense! Yet, one must be warned that carrying out the process of filing for bankruptcy on your own requires a lot of patience and groundwork. To start with, keeping records in order is the key to filing bankruptcy properly, without making any errors. A lot of information will have to be furnished as part of the process of filing and this must be utmost care. Suffice to say, go for a lawyer!
When choosing a lawyer you must be watchful of the credibility and the background of the person you are deal with. When dealing with independent lawyers in particularly, there have been plenty of instances where lawyers don’t cater to your needs adequately because they have their hands full with many other cases. Seek the help of employee assistance programs or of course people you know and trust. A filing fee must be paid to the court; there is the possibility of paying this fee in installments. The fees of the lawyer are different although there are some public-funded legal services programs that don’t charge attorney fees when handling personal bankruptcy cases.
- Free 24-hour Bankruptcy Information Line
- Call 1-800-859-0844
