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Personal Bankruptcy Information
Bankruptcy is one of the most difficult, sometimes even traumatic, situations that can be faced in life. Often due to unexpected medical expenses, changes in employment or other unforeseen circumstances, bankruptcy is a final option for people who face insurmountable debt, foreclosure and other severe financial difficulties.
Bankruptcy is an unfortunate event that can happen to anyone -- from the young entrepreneur to the most established businessman. Since the economy is ever changing, as is the stock market, many people cannot say they live in complete security any longer.
Bankruptcy Information
Debtors file for different types of bankruptcy protection for different reasons. A debtor who files for Chapter 7 protection is typically seeking to discharge all of his debts. A typical Chapter 7 case lasts approximately four to six months, from the petition date to the discharge date.
Chapter 7 bankruptcy is often the better option for those whose debts, such as credit card debt and medical bills, are mostly unsecured. So, if you don't have many assets, your income is below the median, and the majority of your debts are not secured, Chapter 7 bankruptcy might be your best option.
Generally, a debtor who files Chapter 13 is employed and seeking to retain his assets while entering into a payment agreement with the bankruptcy court in order to pay off his creditors. The individual will create a Chapter 13 plan, where he agrees to make monthly payments to the Court for a period of 36-60 months. This should provide the debtor with sufficient time to pay back the agreed upon debts.
Chapter 11 bankruptcy filings are sometimes considered "strategic". In other words, management may wish to reorganize for political reasons, not simply for the sake of balancing books. Chapter 11 is reorganization, as opposed to liquidation. Debtors may "emerge" from a chapter 11 bankruptcy within a few months or within several years, depending on the size and complexity of the bankruptcy.
Plans
In all cases of bankruptcy, plans are presented, creditors vote, and the court makes many reviews until a decision is reached. If the plan is not able to be confirmed, the court may either liquidate the business under Chapter 7 or dismiss the case.
When you plans are accepted, creditors are given priority by a court. Once your assets are distributed, you will be free from most of your obligations, even if your debts are not all paid off. Creditors are paid according to the amount they accept. The smaller the settlement, the quicker they will be paid.
Conclusion
Bankruptcy can be a real stress relief if you are in a desperate situation, but it is important to realize what has brought you to that point. If you declare bankruptcy and then continue without changing your spending habits, you are destined to end up in a similar situation again.
Declaring bankruptcy is not an easy decision, but we can help you sort out your options, review potential alternatives, and then make a decision on how to proceed.
It is a legal opportunity to get a fresh start.
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