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Our firm represents clients in bankruptcy. Bankruptcy is a legally declared inability or impairment of ability to pay one’s creditors. The primary purpose behind bankruptcy is two-fold. First, it is designed to give the debtor a fresh start in life by relieving the debtor of most debts. Second, it provides creditors a fair and orderly method of repayment to the extent the debtor has the means available for payment.
The benefits of bankruptcy include the discharge of most debts and an opportunity for a fresh start, an automatic stay of most actions (stops most collection actions against the debtor, including repossessions, garnishments, foreclosures, utility shut-offs, and evictions), lien avoidance or modification of certain secured debts, the opportunity to repay some or all debts with affordable payments, and the opportunity to assert claims and defenses to creditor claims. However, there are some disadvantages with bankruptcy, including the possible loss of non-exempt property and secured collateral and an impact on debtor’s credit rating.
Chapter 7 - In a Chapter 7 bankruptcy, debtors are permitted to retain certain "exempt" property, while the remaining assets are liquidated by the trustee. The trustee will distribute the funds from the liquidation to holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Accordingly, potential debtors should realize that the filing of a petition under Chapter 7 might result in the loss of non-exempt property. Whether Chapter 7 is available to a particular debtor depends on whether several requirements are met and should be discussed with an attorney.
Chapter 13 - Chapter 13 is designed for individuals with regular income to repay a portion or all of their debt over an extended period of time. A Chapter 13 bankruptcy may be appropriate for debtors who seek to retain certain assets through a repayment plan.
Chapter 11 - Chapter 11 allows corporations, partnerships, and certain individuals who do not qualify under Chapter 13, to reorganize without having to liquidate all assets. As in a Chapter 13, the debtor (called the “debtor-in-possession” because a trustee is not normally assigned) is required to present a repayment plan. If the plan is accepted by the creditors and subsequently approved, or confirmed, by the Court, the debtor has the opportunity to reorganize his, her, or its personal, financial, or business affairs.
Chapter 12 - Chapter 12 is designed for "family farmers" or "family fishermen" with "regular annual income." It enables financially distressed family farmers and fishermen to propose and carry out a plan to repay all or part of their debts. Under Chapter 12, debtors propose a repayment plan to make installments to creditors over three to five years.
We are a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code. |
