My OperaLawyer Lancaster PA What Can Bankruptcy Do For Me
Thursday, September 23, 2010 5:12:21 AM
Some Chapters are more suitable for differing needs, but bankruptcy, in essence, offers help for debtors via the automatic stay on creditors' actions following the filing. The automatic stay ensures that any form of harassment that debtors can experience, including letters, phone calls as well as other demands for funds, must cease. Ultimately, if all of the requirements of the court are fulfilled in the honest and open manner in accordance with complete disclosure, various types of discharge are obtainable allowing the debtor to once again take up their lives or businesses again.
People weighted down by consumer debt, including credit card debt, can anticipate having this debt wiped out as most credit card debt is unsecured. Debtors filing under chapter 7 have to make their non-exempt assets accessible for liquidation to secured creditors. The debtor has to offer payment or give up the collateral. Unsecured creditors will not receive full payment or, indeed, any payment. The bankruptcy court designates a trustee who arranges a meeting with creditors and works with the disposal of assets to creditors based on their status. After the completion of the process the debtor almost always receives a discharge; this means that the debtor is liberated from the troublesome debt and in a position to start life afresh without anymore harassment from creditors.
Though chapter 7 is a legal option predicated on wiping out debt, there is also a provision for reaffirmation of a specific debt assuming the debtor can show sufficient income. In this instance the debtor makes arrangements with a creditor to keep certain property. Chapter 7 does not mean the loss of all assets, so household assets and exempt property can often be retained.
Other approaches to bankruptcy concentrate on reorganization rather than liquidation. These approaches involve the formation in the form of a repayment plan to ensure that the debtor can hang onto property or a business following reorganization, and sometimes consolidation, of debt. Chapter 13 is a reorganization approach that is suitable for people who have a steady income sufficient enough to retain their property and manage their mortgages given assistance and advice.
Again the debtor receives relief on filing on account of the hold on creditor activity, and co-debtors will also be secured from creditors. A repayment plan is formed during debt counseling, but unsecured creditors may receive little or no repayments based on the debtor's circumstances. After three to five years, the debtor is likely to get a discharge of debts.
Family farmers and fisherman are offered chapter 12 a similar approach to debt management but one which encompasses greater debt burdens including those connected with operating these businesses.
Businesses have an option to file for chapter 11 with the possibility to stay in control and operate the business, eventually, eliminating the debt burden. This option is most suitable for larger businesses as it is a complex, lengthy and potentially expensive business. But it is the option that provides the mechanisms businesses need. It provides for flexibility in changing business environments where repayment plans can be modified.
Whether an individual or a business, discharge generally means that the debtor is free from debts in existence prior to filing the petition.
If this article was helpful, San Antonio Bankruptcy expert Audus Zinkman has more simple and easy to comprehend legal articles. If you would like addition info check out his San Antonio Attorney site, and learn what you need to know to be successful.lawyer lancaster pa: attorney lancaster pa
