Bankruptcy is a legal procedure granted by the Federal Law that allows an individual or organization with excessive debt to pay their creditors in a certain amount of time. Bankruptcy attorneys specialize in bankruptcy law which enables them to design a legal plan to assist in paying off debt. There are several types of bankruptcy proceedings under the Bankruptcy Code. Because bankruptcy law specialists are fully in-tune with the most recent changes in the laws; they are best qualified to file the appropriate documents to eliminate debt.
The bankruptcy laws consist of various chapters. These chapters have been designed, keeping in mind the different situations of bankruptcy. In some cases, the bankruptcy court may decide to liquidate all the assets and properties of the debtor, in order to pay off the debts he or she owes to the various creditors. In some other cases, the court may decide the debtor to continue its business operations and pay off the debts as per a fixed monthly repayment schedule. Likewise, in some cases, the debtor is an individual. In some other cases, it is an organisation. The different chapters of the bankruptcy laws describe various situations of bankruptcy.
The chapter 7 bankruptcy law is the most common type of bankruptcy. The bankruptcy laws under this chapter, declare the debtor as bankrupt and all his and her assets and properties are sold off under the trustee appointed by the bankruptcy court. The chapter 13 bankruptcy law allows the debtor to continue its business operations and the court suggests them a repayment schedule to pay off the claims of the various creditors. A chapter 13 bankruptcy is also called a wage earner’s plan as it enables individuals with regular income to develop a plan to repay all or part of their debts.
Before filing for bankruptcy under either chapter 7 or chapter 13, one must attend credit counselling with an agency approved by the government trustee’s office. The reason for this counselling requirement is to help one determine whether he or she really need to file for bankruptcy or whether a casual repayment will them regain their financial stability. A bankruptcy attorneys are also available to find the best legal option for an individual or business to get out of the debt. The bankruptcy lawyer will assist with solving credit problems and provide a stable financial status. Ideally, the bankruptcy attorneys are extremely knowledgeable of the most recent bankruptcy laws thereby providing the individual and business with reliable representation during this process.
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