We are a debt relief agency.
We help you file for bankruptcy relief under the bankruptcy code.
Bankruptcy is a last resort used when you are unable to pay your creditors. The advantage of bankruptcy is that, generally, once the bankruptcy is discharged, you are free from those dischargeable debts forever. The disadvantage is that bankruptcy damages your credit rating, making it difficult to borrow money in the future.
There are four kinds of bankruptcy:
Individual consumers (and couples filing jointly) may use Chapter 7 for a total liquidation of assets. A trustee, appointed by the Bankruptcy Court, turns any property of any value into money to pay your creditors. Some property is exempt; these laws vary from state to state, but generally you will be able to keep your house, most of your personal possessions, and at least one car. Everything else may be sold to pay your creditors.
Individuals (or couples) who have a regular income, can file for bankruptcy under Chapter 13. Generally, you get to keep your property. You make a plan, which is approved by the Court, that will allow you to pay off your creditors over time. A trustee is appointed by the Court who collects the payments from you, pays your creditors and makes sure you live up to the terms of your repayment plan.
Chapter 11 is usually used to reorganize a business. Chapter 11 allows the debtor business to continue operating under a Plan of Reorganization, which must be approved by the Court. Sometimes the Court may also appoint a trustee to operate the business during the reorganization.
The reason for reorganization rather than liquidation is that the business is considered to be more valuable as an ongoing concern than it would be if its assets were sold. Reorganization also saves jobs.
Chapter 12 is used to reorganize family farms. The primary purpose of Chapter 12 is to allow family farmers to reorganize their finances without being forced to sell the farm. Farmers with sufficiently stable income, even if that income is seasonal, are able to make payments toward their debts under a Chapter 12 reorganization.
One of the reasons people file bankruptcy is to get a "discharge." A discharge is a Court order stating that you do not have to pay off most of your debts. However, you should be aware that some debts cannot be discharged. For example, you cannot discharge:
The discharge applies only to debts you accumulated before the date you filed.
It is important that you list all your property and debts in your bankruptcy papers. If you do not list a debt, for example, it is possible that the debt will not be discharged.
The judge can also deny your discharge if you do something dishonest in connection with your bankruptcy case, such as destroy or hide property, falsify records, or lie.
You may receive a Chapter 7 discharge once every eight years.
IF YOU THINK BANKRUPTCY MAY BE YOUR ONLY WAY OUT OF DEBT, PLEASE CALL FOR AN APPOINTMENT TODAY.
This page was last updated on 9/3/08
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