Bankruptcy Law

Bankruptcy law is designed to benefit both debtors and creditors by seeing that debtors get relief from debts they can’t pay, and that creditors get paid from whatever assets the debtor can spare and the debtor can obtain a fresh start. Bankruptcy is governed by the federal law found in Title 11 of the United States Code. As federal law, it supersedes any conflicting state law, so, with the exception of exemptions, bankruptcy law is the same from state to state.

Bankruptcy Chapters

  • Chapter 7 – allows the bankrupt individual to retain essential property (the most common form of Bankruptcy, but not always the best.)
  • Chapter 11 – aka Business Bankruptcy or Over-Limits for Chapter 13 (most expensive) – most large companies reorganize under Chapter 11.
  • Chapter 12 – aka Farmers bankruptcy is a simplified reorganization for family farmers, where the debtor retains his property and pays creditors out of future income.
  • Chapter 13 – a type of repayment plan where the bankrupt individual can keep some of their assets.

Bankruptcy Process

Chapter 7 Bankruptcy is the most common form of bankruptcy. It is a liquidation proceeding in which the debtor’s non-exempt assets, if any, are sold by the Chapter 7 trustee and the proceeds distributed to creditors. Individual debtors typically get a discharge within 4-6 months of filing the case. Assets that are non-exempt are taken over by the trustee, who sells them and pays creditors as much as the proceeds permit. Any wages the debtor earns after the case is begun are the debtor’s, and the creditors have no claim on those earnings. A bankruptcy attorney can advise you regarding which of your assets will be exempt from liquidation, and what you can expect for the future.

Chapter 13 is a repayment plan for individuals with regular income, unsecured debt less than $336,900, and secured debt less than $1,010,650. The debtor keeps his property and makes regular payments to the Chapter 13 trustee out of their future income to pay off their creditors over time (typically 3-5 years). Repayment in Chapter 13 can range from 1% to 100% depending on the debtor’s income and the type of the debt. Chapter 13 also provides a way for bankrupt individuals to avoid foreclosures and repossessions. In certain circumstances, debtors can reduce the balance of loans on vehicles and discharge second mortgages or home equity lines of credit. It is not recommended that you file bankruptcy without the assistance of an attorney, as the bankruptcy process is complex. Based on the factual and legal complexity of your case, a qualified bankruptcy attorney will be able to offer you a customized solution to your situation.

Related Posts
Important part in your dui case
You might not agree with the results of the police report for your DUI case the first time you see it. The report contains the results of the field sobriety ...
READ MORE
Stockton exit imposed losses on bondholders
The date of February 25, 2015 witnessed a new chapter in the life of the Stockton community. It was this day when the bankruptcy exit plan became effective. There were ...
READ MORE
What are the Dos and Don’ts when you are not able to pay rent on time
You don’t have to worry about getting evicted if you can’t pay rent on time. You won’t, not right away at least. It’s inevitable to run short on funds. It’s ...
READ MORE
Common Commercial Lease Terms
The commercial lease clauses are the written and binding agreement on the real estate you will rent for your business. It will help you avoid trap and negotiate for bargains ...
READ MORE
Affordable lawyer for felony charge
The saying, DUI or the Driving under Influence only is enough to tense you up. And you can’t ignore the situations it will lead to. The penalty for the same ...
READ MORE
Car Accidents and Law
Car injuries signify the majority of accidental injuries statements in the United States. According to the National Road Traffic Safety Management, a car incident occurs in the U.S. every ten seconds ...
READ MORE
Social Security disability definition
Social Security Advisory Board has asked whether the Social Security disability definition should be changed in some fundamental way. The Disability Policy Panel studied this question at length and reached ...
READ MORE
Can legal drugs cause DUI DWI arrest?
DUI DWI arrests are usually due to the use of alcohol as well as illegal drugs. Not everybody knows that legal drugs, prescription medicines and other over the counter drugs can ...
READ MORE
An overview: rent withholding
If you are not satisfied with the conditions of the apartment or house you are renting, you can stop paying rent until your landlord does the appropriate repairs. This act ...
READ MORE
Important part in your dui case
Stockton exit imposed losses on bondholders
Not able to pay rent on time? Dos
Common Commercial Lease Terms
Affordable lawyer for felony charge
The Examiners: Linking Repeated Chapter 11 Filings Can
Car Accidents and Law
Social Security disability definition
Can legal drugs cause DUI DWI arrest?
An overview: rent withholding