Personal Bankruptcy
This is Chapter 7 bankruptcy or Chapter 13 bankruptcy. Chapter Seven bankruptcy requires the liquidation of nearly all of a debtor's assets. The proceeds are distributed to creditors. Chapter thirteen permits individuals to keep the majority of their assets. Individuals must create and adhere to a three to five year repayment plan.
Business Bankruptcy
If a business is unable to make payments on time, they may decide to do so. Companies can file for bankruptcy under Chapter 7 or Chapter 11. Chapter 11 is similar to Chapter 13 in that it permits the organization to create a repayment plan.
Exemptions Permitted
State and federal exemptions will allow individuals to file for bankruptcy while retaining a substantial amount of their personal property. Among the items that a person might cling onto are:
Their assets
Their own automobile or pickup
Equipment and instruments required for their profession
Several states allow you to continue receiving retirement, survivor, and death/disability benefits.
Non-Exemptions
Not everything can be eliminated through bankruptcy. You will always be responsible for judge-ordered fees and taxes owed to the Internal Revenue Service. Additionally, creditors have the option to contest certain debts. Such cases will be brought to court, and the verdict will always be decided by a judge.
Declaring Bankruptcy
The procedures for declaring bankruptcy are the same regardless of the type being filed for. You should begin by locating a competent bankruptcy attorney. It is possible without one, but it will be considerably more difficult. In addition, creditors may attempt to compel you to repay funds that you are unable to repay.
A proficient attorney will be aware of which exemptions can be claimed under state or federal exemptions. Additionally, they will know which chapter is optimal for you.
If a debtor has filed for bankruptcy, creditors must cease calling and refrain from requesting additional funds. You will be required to attend a formal meeting with your creditors, which will be led by a mediator appointed by the court.
If an individual or business files for Chapter 7 bankruptcy, the actual meeting will focus on which assets must be liquidated. It is possible to request certain exemptions, but creditors will likely contest them. After your possessions have been disposed of, the mediator handles the resulting revenue. Afterward, he will deliver it to your creditors.
In Chapter 11 and Chapter 13 situations, the repayment plan will be discussed at the meeting. A person will be required to repay less money than they owe, but they must do so in a timely manner.
Bankruptcy can be a fresh start, but it should be a last resort for individuals. Personal debt restructuring should be attempted first, but if that fails, bankruptcy will be helpful.""
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