Bankruptcy is something that more people deal with every year than you might imagine. There are several types of bankruptcy and taking the time to figure out what works for you, what type of bankruptcy is going to help you the most, and how to go about the process can make a big difference. For those that are looking for a Chapter 11 bankruptcy attorney, taking the time to learn the facts can help you in this process.
What is Bankruptcy?
Bankruptcy in general is a legal process by which someone is absolved of their responsibility to pay off their financial debts. This helps them to get back on track if they are behind on payments, it can help them get back on their feet after financial hardships and it can help them to get rid of debt that they simply cannot repay. This not a viable solution for everyone, but for some it is a great solution that does make it possible to get back ahead of your debts.
There are several different types of bankruptcy that are designed to fit the needs of different people and organizations. There are six types of bankruptcy, chapter 7, chapter 9, chapter 11, chapter 12, chapter 13, and a chapter 15 bankruptcy. Each type of bankruptcy corresponds to a different set of circumstances and should be considered carefully to find the type of bankruptcy that is going to work best for you and your particular situation.
What is Chapter 11 Bankruptcy?
Chapter 11 bankruptcy is often referred to as reorganization bankruptcy. This type of filing is going to help the person that is filing to reaffirm certain debts, dismiss others and reorganize their debts and figure out what they are going to do financially. No bankruptcy of any kind can be filed until the person filing has gone through the mandatory counseling and a debt management plan is designed and put into effect. This is going to help ensure that everything has been done to resolve the debt before bankruptcy is filed.
The process starts with a petition to file bankruptcy. This means that the person that wants to file must petition the court to be able to do so. The person in question is then going to create a list of assets, a list of their income and the money that they spend on bills every month, and a list of leases as well. This helps the court to determine if they are going to allow or disallow the bankruptcy. This matters because if someone is spending $1000 on gambling every month and their debt is not being paid, they will not be allowed to bankrupt as they do have the means to pay back debt.
The court can either allow the bankruptcy to begin or they can state that the debtor needs to rearrange their finances and attempt to pay back the debt on their own. With this type of bankruptcy you may be required to sell off assets to help pay back your debts. This type of bankruptcy is normally used with businesses that want to keep intellectual property but that might not want to keep the business going or that can let go of property to help resolve some of the debt.
What is a Bankruptcy Trustee?
With chapter 7 bankruptcy a trustee is very important. They are going to be appointed to help figure out what is going to be sold off, what type of settlements are going to be made and so on. They work to supervise the process and make sure that it is done fairly and equitably. A trustee does get a fee for doing the job, but their main goal is to get as much money back as possible.
When it comes to selling off items and selling off assets, it is the goal of the trustee to get as much money as possible so that they can minimize the amount of money that is going to be defaulted on. Chapter 11 can apply to a whole range of other business and business models. Taking the time to talk with an attorney can help you determine if your case is going to fit a chapter 11 or if it should be applied dot a different type of bankruptcy that is going to work better.
Taking the time to talk with an attorney can help you to figure out what type of bankruptcy is going to work best for you, what you need to collect and have on hand, and what the entire process includes. Bankruptcy is a very helpful thing that can get your finances back in order after a trying time or after a time when perhaps you did not have the money to pay back your debt. Bankruptcy can be confusing; it can be difficult, and it can be truly hard to manage on your own. You do need an attorney to be able to legally file and having an attorney on your side through the entire process can make it that much easier and can reduce your stress in the overall process.
You may also like: How to Get Your Finances in Order After Filing Chapter 7 Bankruptcy
Image source: Shutterstock.com