Bankruptcy Law
Bankruptcy laws help people who can no longer pay their creditors get a fresh start – by liquidating assets to pay their debts or by creating a repayment plan. Bankruptcy laws also protect troubled businesses and provide for orderly distributions to business creditors through reorganization or liquidation.
Most cases are filed under the three main chapters of the Bankruptcy Code – Chapter 7, Chapter 11, and Chapter 13. Federal courts have exclusive jurisdiction over bankruptcy cases. This means that a bankruptcy case cannot be filed in a state court.
Primary Purposes of Bankruptcy Law
The primary purposes of the law of bankruptcy are:
- to give an honest debtor a "fresh start" in life by relieving the debtor of most debts, and
- to repay creditors in an orderly manner to the extent that the debtor has property available for payment.
It is important to understand that you may not qualify for a bankruptcy or that you may not get the specific chapter that you are looking for. Therefore, it is imperative that you consult with an attorney to discuss your options. Please feel free to take advantage of the FREE LEGAL CONSULTATION offered by our firm so that you may make an informed decision regarding your future.
The Bankruptcy Process
A bankruptcy case normally begins by the debtor filing a petition with the bankruptcy court. A petition may be filed by an individual, by a husband and wife together, or by a corporation or other entity. The debtor is also required to file statements listing assets, income, liabilities, and the names and addresses of all creditors and how much they are owed.
The filing of the petition automatically prevents, or "stays," debt collection actions against the debtor and the debtor's property. As long as the stay remains in effect, creditors cannot bring or continue lawsuits, make wage garnishments, or even make telephone calls demanding payment.
In many bankruptcy cases involving liquidation of the property of individual consumers, there is little or no money available from the debtor's estate to pay creditors. As a result, in these cases there are few issues or disputes, and the debtor is normally granted a "discharge" of most debts without objection.
Ignoring your legal problems is likely to cause you greater expense, difficulty, and frustration in the long run. Therefore, please feel free to take advantage of the FREE LEGAL CONSULTATION offered by our firm so that you may make an informed decision regarding your future.