What is Bankruptcy?
If you are looking to reduce or eliminate certain of your debts, bankruptcy is the best option you should choose. You can also provide a timeline on your own to repay the non-dischargeable debts. Even secure debts that are a debt pledged with a real estate property or vehicle as collateral are also repaid. In title 11 of the US code, federal bankruptcy law is there. Under the constitutional grant of authority, Congress passed the bankruptcy code to “established uniform laws on the subject of bankruptcy throughout the United States”.
The bankruptcy court which is a part of the Federal District Court system supervises the proceedings of bankruptcy. There is a Trustee who oversees the administration of the proceedings. Bankruptcy helps you to get rid of your debt. However, it is a critical process. Getting in touch with an attorney is advisable as they will give you correct guidance from the beginning. You can also contact Recovery Law Group from Los Angeles & Dallas, TX for the same. Contact – (888-297-6203) / https://www.recoverylawgroup.com/bankruptcy/
Types in Bankruptcy
Bankruptcy can be filed under various chapters. Some of the most important and common chapters are:
1) Chapter 7
For the discharge of unsecured debts, that is personal loans or debts from credit cards this is the best option. Chapter 7 is available to corporations and individuals with business debt primarily. To be able to file a chapter 7 petition you need to meet certain income requirements. However, to discharge your debt, there may be a possibility that you need to sell your assets under this chapter.
2) Chapter 9
The reorganization of municipalities and related local entities such as School districts or country-owned hospitals are taken care of in chapter 9. Corporations and individuals cannot file under this chapter.
3) Chapter 11
This chapter follows the process of reorganizing debts. Through this chapter, you can repay some debts, discharge others, and restructure the remaining. Individuals can file under this chapter. However, filing fees and administrative costs being high lead individuals to mostly file for chapter 7 or chapter 13 bankruptcy proceedings.
4) Chapter 12
This chapter provides the restructure of debts for family farmers. Only family farmers defined in Section 101 of Title 11 are eligible to file.
5) Chapter 13
This chapter allows repayment of debts over 3 to 5 years and also permits the discharge of some debts. Secure debts can either be eliminated or a reduction in the principal amount is possible. A debt that cannot be discharged in bankruptcy can also be structured in a repayment plan under this chapter. Only individuals may file under this chapter.
Certain debts like recent tax child support student loan criminal restitution cannot be discharged in bankruptcy. Individuals can keep certain of their assets without regard to the type of bankruptcy they are filing for. But it is important to remember that everything is not written. Seeking the help of an attorney from the beginning helps you save a lot of time and effort. Bankruptcy is a process may scene very easy. But as you go into it keeps getting complicated.