Bankruptcy is not necessarily a negative thing. There are countless reasons why people need to acquire financial protection from creditors. Businesses and individuals are both able to file when needed. In the recent past, filing a Chapter 7 or Chapter 13 was considered a very bad thing. While it is still not a great thing according to banks, the general public has come to realize current economics is not what it use to be.
This topic once was taboo. Announcing to business acquaintances and other social circles that this is the plan of action once brought about a shift in relationships. This is not so much the case as more and more people are finding it difficult to stay on top of bills and other living expenses. Medical costs, job loss, gasoline, and tuition fees are sky-rocketing while wages remain the same. It is understandable how even the most responsible individuals find themselves facing a losing battle.
Before filing, it is normal to feel anxious. Once the decision is made to get legal help, it is advised to look for an attorney that openly advertises a specialty in practicing bankruptcies. This generally means the lawyer is more likely to accept the case.
There are different types of bankruptcies that are filed; there are three separate types which are filed for most frequently. They are referred to as Chapter 7, Chapter 11, and Chapter 13. Private individuals or businesses may file for Chapter 7. Chapter 11 is also available to businesses and individual although businesses tend to use this one most often. Chapter 13 is intended only for individuals.
The three main types of bankruptcies filed are called Chapter 7, Chapter 11, and Chapter 13. All three of these follow strict guidelines. Unlike other court cases that are heard in superior court or family court, this type of legal proceeding takes place in a court system designated specifically for these discussions.
Chapter 11 is used most often by businesses. Court fees and other pertinent legal fees are higher. In order for an individual to file, combined debts must amount to at least one-million dollars. Payment arrangements may be made to pay-off portions of debts or the full amounts owed, despite the large sums of money involved. Business owners may also elect to sell their business while obtaining protection from creditors under a Chapter 11.
Chapter 13 is organized slightly different. Intended for individuals who maintain a steady income, payment plans are arranged over a five-year period to pay back creditors part or all of their losses. Chapter 13 can be used to retain a home once the loan on it is in default status, retain various assets, and slow tax proceedings.
The United States Bankruptcy Code is very detailed. Each filed case is slightly different; creditors listed and debts amounts vary. When an individual or business finds it necessary to file, increased stress levels follow. Obtaining an attorney who communicates well with all parties involved is an asset during this time. That component is usually discovered through recommendations and referrals, if not personal experience.