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Bankruptcy Law Questions
Sometimes individuals, corporations, or partnerships must file for bankruptcy because they are unable to pay their creditors. If you are worried about creditors suing you or taking your home or business, it may be time to file for bankruptcy.
In a bankruptcy proceeding, a plan is devised so that you can get rid of your debts even if you cannot fully pay them immediately. If you own a business, you may be able to stay open and continue making money to repay the debt.
There are a number of different ways to file for bankruptcy. Chapter 11 bankruptcies focus on restructuring a business so it can stay in operation to make money so creditors can be paid. Chapter 13 bankruptcies usually prevent foreclosures and car repossessions and protect you from creditors getting your assets. Instead, debts are consolidated and a long-term payment plan over several years is structured to pay off all the outstanding debts. This type of bankruptcy requires you to be working or have a steady source of income. Chapter 7 bankruptcy proceedings, on the other hand, eliminate the debts faster, but creditors may agree to accept a portion of the money owed to satisfy the entire debt. You typically do not have to give your home or vehicle, unless they have a lot of accrued equity.
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