Learn more: Bankruptcy Law

What is Bankruptcy law?

Bankruptcy law is the system of rules that govern unfortunate situations where individuals or organizations possess an overwhelming amount of debt and are seeking a way out.

When to hire a Bankruptcy attorney

Are you facing financial difficulty? Filing for bankruptcy can help you take control of your financial future and put an end to wage garnishment, foreclosure, and debt collectors.

If you suffered a job loss or lost wages, have insurmountable medical bills, are facing foreclosure, or have experienced the loss of household income that often accompanies divorce or death

Chapter 7 Bankruptcy

Chapter 7 is the most common type of bankruptcy for individuals. A court-appointed trustee oversees the liquidation (sale) of your assets (anything you own that has value) to pay off your creditors (the people you owe money to). Any remaining unsecured debt (like credit cards or medical bills) is typically erased. But as we mentioned earlier, this doesn’t include the types of debt that aren’t forgiven through bankruptcy, such as student loans and taxes.

Chapter 13 Bankruptcy

While Chapter 7 bankruptcy often forgives your debt, Chapter 13 bankruptcy basically reorganizes it. The court approves a monthly payment plan so you can pay back a portion of your unsecured debt and all of your secured debt over a period of three to five years. The monthly payment amounts depend on your income and the amount of debt you have. But the court also gets to put you on a strict budget and check all your spending (ouch!).

chapter 11

For the most part, Chapter 11 bankruptcy is used to reorganize a business or corporation. Businesses come up with a plan for how they’ll continue operating the company while paying off their debt, and both the court and the creditors must approve this plan. Some individuals, such as real estate investors, who have too much debt to qualify for Chapter 13, but who also have a lot of high-value properties and assets, may also choose to file under Chapter 11. But unless you’re a pro athlete or a celebrity, you’re probably not going to mess with this one.

Chapter 12

This is a repayment plan that allows family farmers and fisherman to avoid having to sell all their stuff or foreclose on their property. While it’s similar to Chapter 13 bankruptcy, Chapter 12 is a little more flexible and has higher debt limits.