Bankruptcy Information: Some Basics
Finding yourself in a difficult financial situation can be scary. Facing the possibility of dealing with bankruptcy can be even scarier, especially since most individuals or businesses don’t spend time making themselves aware of the legalities that go along with the process. Since many debtors are ashamed of the situation, they often fear asking too many questions regarding the process. As bankruptcy is one of the most important financial decisions a business or individual will ever make, it is essential to have correct bankruptcy information before getting starting with the process.
The federal court systems in the United States deal with all bankruptcy information and set the laws regarding the process. This does not mean that an individual has to go to Washington D.C. to file though, as each state will deal with individuals and businesses during proceedings. This may mean going all the way to the state capitol though. The federal laws on bankruptcy information state that these laws are in place simply to give an honest, but fallible debtor a fresh start.
One of the most important pieces of bankruptcy information to know is that the courts don’t come to the individual or business to file, the individual or business goes to the courts. Keep in mind that the debtor does not have to hire an attorney to represent them through the proceedings, although attorneys can be a great source of knowledge regarding bankruptcy information. Many debtors are scared to hire an attorney because of additional charges that they cannot afford, but most attorneys are reasonably priced due to the circumstances. Often times attorneys will not charge a fee for an initial consultation when the debtor is simply trying to acquire bankruptcy information.
Unfortunately, most of the general public does not have a thorough understanding of bankruptcy information. This causes misconceptions regarding bankruptcy. One of the major misconceptions of bankruptcy is that all possessions are taken and repossessed by the courts. Since there are many different chapters of bankruptcy, there are also many different takes on repaying debts, and only Chapter 7 requires a complete liquidation of assets. Even with Chapter 7, debtors are allowed exempts, or items that are necessary for living.
One more important piece of bankruptcy information to keep in mind is that there is a bankruptcy law in place called Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). This law was implemented in 2005 to stop fraudulent bankruptcy claims and may make it more difficult to convince the courts of a claim.
Although filing for Chapter 13 and Chapter 11, or reorganization plans, have not changed that much, filing for Chapter 7 has become a little more difficult. Previously, debtors were not required to take courses on debt, but with BAPCPA in place, Chapter 7 debtors must take a Credit Counseling course to get their discharge.
Call Wessler Law firm and speak directly with an attorney today. We offer free, no obligation, consultations to see if you qualify for bankruptcy and if it is the right decision for you and your family.
Wessler Law Firm is a small family owned law firm specializing in bankruptcy law since 1982.
Disclaimer: This article is meant for reference only, and is not intended to be legal advice.
For legal counsel regarding your situation, please consult an attorney licensed in your state.