Bankruptcy is a legally stated inability of an individual or organizations to pay their creditors whereas personal bankruptcy is a procedure which allows an individual to declare bankruptcy. Bankruptcy laws provide for the development of a plan that allows a debtor, who is unable to pay his creditors, to resolve his debts through the division of his assets among his creditors.
The bankruptcy cases cannot be filed in the state court but can only be filed in the bankruptcy court. The motive of a bankruptcy law is to help people who can no longer pay their creditors get a fresh start by creating a repayment plan. In addition, through reorganization or liquidation, Bankruptcy laws help protect businesses in trouble and provide orderly distributions to the business creditors.
Before filing for bankruptcy, you must be aware of most common bankruptcy questions to ask and the basics of how to file bankruptcy. Basics provide information on different aspects of the federal bankruptcy laws.
The bankruptcy laws have been categorized in chapters. Chapter 7 bankruptcy cases are commonly referred to as liquidation cases and may be filed by an individual, corporation or a partnership whereas chapter 11 bankruptcy is known as “reorganization”. The chapter 12 bankruptcy is the one which offers bankruptcy relief to those who qualify as farmers and the chapter 13 bankruptcy is the debt repayment chapter for individuals with regular income and whose debts do not exceed $ 1000000.
For more information and correct advice on how to proceed with filing for bankruptcy or any other details required, do contact us and our team of expert lawyers will guide you at every step.