In October 2005, the bankruptcy law was revised in response to creditors' claims that it was too simple for people to declare bankruptcy in order to avoid paying their bills. But if you are in dire financial straits and cannot honestly pay your debts, the stricter filing requirements of the new bankruptcy law will not delay your bankruptcy.
Numerous sections of the bankruptcy code address both individual and commercial bankruptcies. The purpose of the law is to distribute certain assets after statutory exemptions are subtracted, then use the proceeds to pay off as much debt as feasible. The court determines how much each creditor receives. All bankruptcies must be handled by a federal district court, despite the fact that each state has its own laws governing the payment of creditors. This is just one more reason why you need a bankruptcy lawyer.
The bankruptcy law established """"chapters"""" that simply designate the type of bankruptcy being filed. Chapter 7 is the most frequently utilized by individuals. A court-appointed trustee supervises the identification and sale of non-exempt assets, as well as the application of the proceeds to pay off debts. Realistically, because assets such as a home and vehicle may be exempt, asset liquidation is typically unnecessary. Large corporations that are reorganizing and must restructure debt in order to endure utilize Chapter 11. Additionally, there is a chapter 12 for cultivators and a chapter 13 for individuals seeking a court-supervised repayment plan.
Numerous facets of the law can have a bearing on the ultimate outcome for individuals filing chapter 7 bankruptcy. The law prohibits the cancellation of certain debts, such as child support. If your debt complies with the regulations for determining exempt equity, you will not forfeit your home. The same applies to your vehicle. You may also maintain cash accounts as long as their aggregate value does not exceed $10,000. Recent court decisions have determined that retirement accounts such as IRAs are also exempt.
It is evident that the new bankruptcy law contains numerous complicated provisions, but the purpose of these statutes is to provide you with an opportunity to start over without a hefty debt load. Your bankruptcy counsel will provide assistance throughout the entire procedure.""
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