There are numerous different types of bankruptcy and bankruptcy law, including Chapter 7 bankruptcy, Chapter 11 bankruptcy and Chapter 13 bankruptcy. Chapter 7 and Chapter 13 bankruptcy are most common for individuals, while Chapter 11 is bankruptcy intended for businesses and companies. Arming yourself with the right resources surrounding the bankruptcy process will allow you to make educated decisions regarding your debt and personal finance, because bankruptcy is a serious legal process that cannot be undone once you begin the process.
Please click here to see what debt is dischargeable.
Personal Bankruptcy
Also known as Consumer Bankruptcy, this pertains to individuals. Individuals may choose to file bankruptcy to resolve a seemingly hopeless financial situation, or to delay debt-collection for a period of time to allow for financial reorganization. Personal Bankruptcy generally takes one of two forms: Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Chapter 7 Bankruptcy is a way for Debtors to get a "Fresh Start" and eliminate debt.
Chapter 7: This is generally called a "Straight Bankruptcy" or "Liquidation", is by far the most favorable because you can enter into it and “discharge” all or most of your unsecured debt. That means you will not have to pay any of it back. However, there is a specific criterion that must be met in order to qualify for Chapter 7 Bankruptcy. The principal advantages of Chapter 7 are that the case is usually completed within three months, generally only one court appearance is required, and you emerge without any future obligations on the discharged debts.
Chapter 13: This type of case is also referred to as a “Repayment”. It is often used to catch up on past due mortgage or car loan payments, and can address debts that would not be dischargeable in a Chapter 7 plan. A Chapter 13 Plan must be proposed to pay all or part of the debts from future income over a period of time ranging from three to five years. Once approved, the matter is settled, even if your creditors were not willing to work with you. If you make the payments as required, you will not have to surrender property to the trustee.
Business Bankruptcy
Any formalized entity of business can file for Chapter 11 bankruptcy in accordance to United States Bankruptcy Code Title 11, Chapter 11 and under the terms of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
Included in the entities able to reorganize and restructure under Chapter 11 bankruptcy include:
Sole Proprietorships
Partnerships
Limited Liability Partnerships
Limited Liability Corporations
Corporations
Co-operatives and Non-Profits
When utilizing a Chapter 11 restructuring, companies face the prospect of continuing business in light of current debt obligations. For executives and employees, the possibility of maintaining jobs, an income source, and retaining all assets used in producing this income are all retained. Furthermore, companies have been known to emerge from Chapter 11 bankruptcy and regain full control of their enterprise once again rather than full liquidating their assets. A bankruptcy court will supervise a company under Chapter 11 bankruptcy, manage the organizations debt, and contract obligations. Under the guidance of federal law, bankruptcy courts can discharge certain debts and contractual obligations in certain circumstances. In other instances, creditors will entirely take over a company in the event the organization’s debts outweigh the current assets.Under the mediation of the bankruptcy courts, creditors and debtor companies meet to discuss plans for reorganization and restructure. Typically, a debtor company has a specific period to offer a plan of reorganization, which will include methods to satisfy existing debts, cuts in expenditures, and potential incomes. Creditors will then vote to agree or disagree on the plan, or if no plan is presented, creditors have the opportunity to present their own agenda. The court will decide whether each party is receiving treatment in the fair and equitable interest of resolving the matter at hand.
When meeting with a bankruptcy attorney for counsel, our firm can assist individuals in determining a clear outlook on their financial situation, as well as ascertain the probable outcome of petitions to file for Chapter 7 or Chapter 13 bankruptcy. If you have determined that filing for bankruptcy protection is the best means for addressing your outstanding debt obligations, we can offer you protection from creditor judicial sales, as well as generally harassing calls, letters, and other attempts to obtain debt repayment.
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329 Hempstead Turnpike W. Hempstead, NY 11552 Tel: (800) 284-0144 Fax: (631) 824-9384 Info@Bankattorney.us We are a debt relief agency serving individuals and businesses located in New York’s Kings (Brooklyn), Queens, Staten Island, Bronx, Westchester, Nassau and Suffolk Counties (Long Island). We assist people and businesses to file for relief under the Bankruptcy Code.
