Financial hardship can be extremely stressful. In many cases, Bankruptcy can help alleviate this heavy burden and allow for a fresh start. Our referral attorneys are experienced in debt liquidation and reorganization and will help you work toward a new financial beginning.
Bankruptcy is a process in which consumers and businesses can eliminate or repay some or all of their debt under the protection of the federal bankruptcy court. For the most part, bankruptcies can be divided into two types -- liquidation and reorganization. Though bankruptcy can eliminate many kinds of debts, such as credit card debt, medical bills, and unsecured loans, other debts, including child support and spousal support obligations and most tax debts, cannot be discharged through bankruptcy.
To be eligible for Chapter 7 bankruptcy, a person must meet several criteria. Your income cannot be over a certain amount, and if it is, you must pass the "means test." In addition, the court will dismiss your case if you have filed a previous bankruptcy within a certain period of time, or if the court believes you are cheating your creditors.
The primary function of a Chapter 7 bankruptcy proceeding is to liquidate the debtor's nonexempt assets and distribute the proceeds to the debtor's creditors. In order to be eligible for Chapter 7, the debtor must satisfy a "means test." The court will evaluate the debtor's income and expenses to determine if the debtor may proceed under Chapter 7.
Chapter 13 of the Bankruptcy Code provides for adjustment of debts of an individual with regular income, often referred to as a "wage-earner" plan. Chapter 13 allows a debtor to keep property and use disposable income to pay debts over time, usually three to five years.
Chapter 11 bankruptcy proceedings offer corporations and partnerships the opportunity reorganize their finances. A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in Chapter 11.(The above is only meant for informative purposes and is not legal advice).
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