Bankruptcy is not a new thing. Bankruptcy laws have been on the books since the early civilization of mankind. Bankruptcy is designed to help people who cannot meet their financial commitments. Dealing with bankruptcy can be a trying time for anyone. At the law offices of Bradley J Abbas PLLC, our professionally trained staff would like to help reduce the stress and headaches of the process for you. We know the ins and the outs of bankruptcy law.
Bankruptcy falls into two major categories; liquidation and reorganization. A Chapter 7 bankruptcy is the most common form of a liquidation bankruptcy. In this case, the debtor must give up their non-exempt property so that it can be sold to pay off part of the debts that are owed. The remainder of the debts are then forgiven. Most people are allowed to keep the majority of their property that is exempt. Exempt property can include household items, work tools, clothing, vehicles and even the personal residence. A trustee will be assigned to sell the non-exempt property to pay the creditors. The benefit of a Chapter 7 bankruptcy is that all of the debt is wiped out.
The second type of bankruptcy is called reorganization bankruptcy. This type most often takes the form of a Chapter 13. In this case, the debtor is allowed to keep all their property, but must repay a portion of their debts. The court is able to restructure the debt by reducing what is owed and extending the payments over the course of three to five years.
Businesses are also allowed to file bankruptcy as well. If they are overwhelmed by debt, but would like to stay in business, they may be able to file for Chapter 11. It is similar to the Chapter 13 in that it lets you restructure your debts. It offers you protection from your creditors until you are able to establish a plan to repay your debts
There are restrictions on filing for bankruptcy. People are not eligible if they have filed a Chapter 7 in the last 8 years, Chapter 13 in the last 6 years or have too much disposable income. A means test has been established to determine if people are eligible to file or not. If a debtor makes enough money to pay their commitments, they may not be allowed to file for a bankruptcy.
Whatever your bankruptcy law needs are, we are here to serve you. Please contact us today to see how we can help you work through your bankruptcy issues.