Introduction
Filing for bankruptcy is a long and strenuous process; it should only be done as a last resort when all other debt consolidation measures have been exhausted. It is essential to engage the services of a bankruptcy attorney to give you legal aid throughout your case. If you are in a position where you can no longer pay your debts then you should take bankruptcy into consideration. However, you should carefully access the effects it will have on your life. Indeed, bankruptcy can give you a clean start on your financial life, but there are also consequences. It is also wise to have a clue of bankruptcy laws and how they can affect you, this article provides an overview of bankruptcy laws which will help you to know and understand your options.
Understanding bankruptcy
Filing from bankruptcy protects you in the event that you are financially incapacitated and unable to pay your debts. It also gives you a workable solution and can buy you time to consolidate your loans. If you cannot arrive at a common agreement with your creditors then you can exercise your right to file for bankruptcy. This will also stop the constant calls and nagging from creditors. Bankruptcy can be voluntary where you provide documentation to a court of law and file for bankruptcy. It can be involuntary in the event that your creditors file a plea and the court can declare you bankrupt.
Bankruptcy laws procedures and limitations
There is no set limit on the amount of debt that allows you to file for bankruptcy. Basically, in order to file for bankruptcy, you need to be a citizen of that country, some state laws may dictate that you must own some form of property or a business in that particular state. When you decide to file for bankruptcy a trustee may be appointed by the court who will be the custodian of your property. Most bankruptcy laws stipulate that you must present a petition and a current statement of affairs. After this the bankruptcy process begins, the trustee may also advice you to liquidate your assets. It is essential to consult with a registered trustee prior to filing for bankruptcy. He will carefully access your debt situation and give you advice on the course of action you should take.
Chapter 7 and chapter 13 bankruptcy laws
The two most common bankruptcy chapters are 7 and 13. Under chapter 7, the petitioner does not have assets which can be sold to pay his creditors. The court may be inclined to discharge their debts and retain certain properties which are exempt. To qualify to file for bankruptcy under this chapter, you can be a partnership, a corporation or an individual. Under chapter 13 bankruptcy laws, one can be allowed to retain their assets and repay their debts over a stipulated time frame, which is normally between 3 to 5 years. It is important to have keen look at these two chapters and decide which one best addresses your situation and of course the implications it will have. The importance of having a bankruptcy attorney cannot be overemphasized, bankruptcy cases are tricky and they require a professional with extensive knowledge of the law.
