Growing up in a small rural community, I never really knew much about bankruptcy. It was a word that was whispered occasionally or said in a hushed tone as someone walked by, but not a common word. As I have grown older and as economic times have grown worse, it is becoming a very common word in our society. If you want to understand more about bankruptcy and bankruptcy law then continue reading and learn about the process and the best way to insure that you handle it properly.
Bankruptcy is when a person legally declares that they are unable to pay their creditors. Normally bankruptcy is a last resort for an individual after they have exhausted all means of paying their bills. With the current financial crisis that is occurring in the United States, there is a plethora of people declaring bankruptcy. It is very important to understand the different types of bankruptcy and the laws surrounding them if you find that you are in this situation.
There are a number of different “types” of bankruptcy. Perhaps you’ve heard terms tossed about such as Chapter 7 or Chapter 11 and wondered what they meant. For the most part, these are the two terms that you probably heard about. If an individual declares bankruptcy, they normally file Chapter 7 or Chapter 11. In a Chapter 7 type of bankruptcy claim, the individual normally gets to keep one vehicle, their main home, and personal assets such as clothing. Excess personal items, such as other vehicles are sold and the money earned is doled out between the creditors. Normally, most or all of the dept that the debtor owed is “forgiven”. This is a common type of bankruptcy declared in the United States. Another type of bankruptcy that is commonly declared is Chapter 11. Chapter 11 bankruptcy is normally declared by individuals who owe very large and substantial amounts of money. Because they owe such enormous amounts of money, their creditors will not “forgive” such large amounts, so they find they must declare Chapter 11. In Chapter 11 bankruptcy, the debtor also gets to keep most of their assets, but the court and creditors come up with a plan for the debtor to pay back the money that they owe over a number of years.
Whether you find that you are a person who needs to declare Chapter 7 bankruptcy, Chapter 11 bankruptcy, or another of the types of bankruptcy, the most important thing to do is know your rights as the debtor. The easiest way to make sure you are handling the process correctly is to find a lawyer who specializes in bankruptcy law. As with anything in life, it is better to find someone who knows the ins and outs of a topic. By choosing a lawyer who specializes in bankruptcy law, you will have someone on your side that knows the most current laws and can make sure that you are given the fairest treatment on your individual circumstances!
Disclaimer: This article provided by Jodat Law Group of Bradenton, FL