BANKRUPTCY

What is Bankruptcy

When you feel as if you have exhausted all other options, filing for bankruptcy might be the answer, but it all depends on your ability to jump through the necessary hoops. Bankruptcy relief carries a whole library of rules, and retaining legal guidance could make your life far easier. Here’s how the process works and why so many individuals depend on Palisade Legal Group to help them get through it.
What to Know About Bankruptcy Going bankrupt means that you can’t pay your debts and that a court has approved your petition for formal relief. Since each petitioner’s situation is different, the U.S. Bankruptcy Code includes provisions for distinct kinds of protection and relief. There are two main types of bankruptcy for consumers. Chapter 7 bankruptcy is meant for low-income filers. A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Usually, you have to pass a test to demonstrate that your income is low in order to qualify. Chapter 13 bankruptcy is meant for debtors with steady income. This type of bankruptcy allows debtors to repay part of their debts via a structured repayment plan. After three to five years, the remaining debt is discharged. Mortgage holders often have to file Chapter 13 bankruptcy so that they can repay their arrears and avoid foreclosure; this type of debt usually is not discharged via Chapter 7.
Your attorney can help you decide which type of bankruptcy to file and explain what your legal requirements are. (You usually have to complete credit counseling and a financial management course in addition to other requirements.) Contact the Palised Legal Group to schedule a consultation about bankruptcy today.