Personal bankruptcy is a legal procedure initiated by a private or an organization that can not pay their financial obligations and seeks to have the debts discharged or rearranged by the courts. The 3 most typical kinds of bankruptcy proceedings are Chapter 7 individual petitions, Chapter 11 company reorganization and rehabilitation petitions, and Chapter 13 wage earner's plans. Bankruptcy cases almost exclusively fall under federal law, though states may pass laws governing issues that federal law doesn't deal with. Special insolvency courts nationwide deal with only debtor-creditor cases. Typically, any bankruptcy-related claim should be filed with the U.S. Insolvency Court. Terms to Know Insolvency Petition - The file submitted with the U.S. Personal bankruptcy Court that starts an insolvency proceeding; normally includes the debtor's properties, financial obligations, and other liabilities Chapter 7 (Individual Personal Bankruptcy) - A petition filed under Ch. 7 of the U.S. Bankruptcy Code for a private debtor to liquidate his or her properties and settle or discharge debts Chapter 11 (Service Reorganization) - A petition filed under Ch. 11 of the U.S. Personal Bankruptcy Code for a company to reorganize its liabilities and possessions, as well as settle or release its debts Chapter 13 (Wage Earner's Strategy) - A petition submitted under Ch. 13 of the U.S. Bankruptcy Code where an insolvent debtor might ask the court to grant extra time for the debtor to pay off Click for source his or her debts, so long as the debtor is earning a constant income Insolvent - Not able to pay one's debts as they come due Discharge - To release a debtor from his/her liability to pay a debt For more legal meanings, visit the Findlaw Legal Dictionary.Learn more about FindLaw's newsletters, including our regards to use and personal privacy policy.
Although many attorneys are free to request approval to practice in U.S. Insolvency Court, successfully representing bankruptcy customers requires extensive knowledge of the U.S. Personal Bankruptcy Code. Attorneys without the proper experience might not know all of the choices available to a customer facing insolvency, and as a result, they might not be able to broker the most helpful bankruptcy strategies.
Bankruptcy procedures can have long-term advantages and consequences for a person's monetary and family scenarios. This is another reason discovering a skilled legal representative is important. A legal representative who has assisted many customers through bankruptcy can much better prepare you and protect your possessions and minimize the unfavorable results. If you are facing personal bankruptcy, get in touch with a personal bankruptcy lawyer right away to preserve your legal rights and explore your legal alternatives.