In: Root » Legal and finance » Bankruptcy
Bankruptcy law not only protects the interest of the government and the creditors, but it protects the debtor that is filing bankruptcy. There have been several chapters of bankruptcy developed to fit the special needs of those filing bankruptcy and certain laws to be followed with them. Among the bankruptcy chapters are chapter 7 (liquidation of assets for businesses and individuals), chapter 9 (municipal bankruptcy), chapter 11 (rehabilitation, primarily used by businesses), chapter 13(rehabilitation for individuals), and chapter 15 (international cases). The most common forms of bankruptcy we find being filed are chapter 7, chapter 12, and chapter 13. Chapter 7 bankruptcy involved the liquidation of assets to partially or fully pay of the creditors. There are cases in which there may be no assets to liquidate, but if there are, then the individual may lose some of their property. In the meantime, the creditors cannot legally contact the debtor to collect on the debt. Chapter 12 bankruptcy allows farmers with bankruptcies and real estate debts to have their debts cleared by using the profits from future crops. With drought being as severe as it is in some places around the country, this option has most likely had to have been exercised in many cases. Yet the future profits made in non-drought seasons will resolve their debt. Chapter 13 bankruptcy, often referred to as the “wage earner’s law” works just like a periodic payment plan for debts owed to the creditor. These debts are paid off through the earner’s wages. Chapter 13 bankruptcy laws state that the debtor can keep their property as long as they do not default somehow on the payments. If they default on the payments, then they will be subject to chapter 7 bankruptcy law and assets will be liquidated to resolve the debt with the creditors. The above are just a few of the laws associated with each type of bankruptcy. Other laws can include what debts can be discharged and which cannot, and the creditor’s ability to show up at the bankruptcy hearing. Again, they are laws that are not only in the best interest of the government and creditor, but yours as well. Bankruptcy is not for everyone. If you feel bankruptcy is the only thing that can help you, go to www.getlawyeradvice.com for a bankruptcy attorney near you.
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