What is Bankruptcy?

Early on in American history our founding fathers recognized the importance the American worker and business owner’s opportunity to start over. Bankruptcy is a generalized term describing a federal court procedure designed to help individuals and businesses rid themselves of debt and repay those they owe. Bankruptcy Law provides two basic forms of relief:

(1) Liquidation – Chapter 7 and

(2) Rehabilitation – Chapter 13 (also known as reorganization).

Chapter 7

Both individuals and businesses may find themselves with more debts than they can pay when due. In such cases, filing for bankruptcy may provide a solution to what seems like an insurmountable problem. Most bankruptcies filed in the United States involve liquidation, which is governed by Chapter 7 of the Bankruptcy Code. A bankruptcy lawyer’s goals are to help Chapter 7 debtors make a fresh start and ensure that creditors are paid.

A Chapter 7 bankruptcy case does not involve the filing of a plan of repayment. In Chapter 7 the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. In addition, the Bankruptcy Code will allow the debtor to keep certain “exempt” property; but a trustee will liquidate the debtor’s remaining assets. Learn more about Chapter 7…

Chapter 13

Chapter 13 debt relief allows you to consolidate ALL of your debt, including student loans and taxes into a structured debt repayment plan. Chapter 13 offers a number of advantages other than liquidation as described in Chapter 7. A chapter 13 bankruptcy enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan and make regular installments to creditors over a period of time. Chapter 13 offers individuals a plan to save their homes from foreclosure.

Most people who file for bankruptcy are hardworking, honest people who have repaid their original amount borrowed, but can’t get ahead of the interest. Most people who file have juggled monthly bills before finally realizing they are no longer working for their own family. After you file, many creditors consider you to be a better credit risk, and you can usually start rebuilding your credit history immediately. Should I file for bankruptcy?

So the question is should I file and if so for Chapter 7 or 13?

Attorney Robert Jacquard is well-versed in all bankruptcy proceedings and can advise you as to whether or not to file bankruptcy and if so, which approach.