Bankruptcy
Solutions

How Can "Bankruptcy" Resolve Debt?

There are several different kinds of bankruptcy cases filed under federal bankruptcy law, which is a set of codified statutes under title 11 of the United States Code. The goal of bankruptcy law is to allow an orderly resolution of debt, where the borrower is having difficulty paying part of, or all of, the debt. There are several unifying concepts in bankruptcy cases:

• "Automatic Stay": The bankruptcy "automatic stay" immediately stops all collection activity, and broadly, protects the debtor from its creditors.
• "Discharge Order": A bankruptcy "discharge" gives permanent legal forgiveness for the debtor's debts, as listed in the schedules of the bankruptcy case, upon completion of the case.
• "Disclosure": The broad "disclosure" by the debtor of its finances — assets, liabilities, income and expenses — to allow for administration of the case.
• "Fresh Start": At the conclusion of the bankruptcy case an honest and cooperative debtor is supposed to get a "fresh start" financially.

Our Law Office can assess potential clients for different kinds of debt relief, under the several chapters of the Bankruptcy Code, as follows

:

• Chapter 7 of the Bankruptcy Code Chapter 7 eliminates or discharges unsecured debt such as credit card debt and personal loans. To proceed under Chapter 7, a debtor would need to qualify under "means", budget and asset tests. "Bankruptcy planning" is often critical to Chapter 7 success.
• Chapter 13 of the Bankruptcy Code Chapter 13 allows an individual debtor to offer a plan, up to five (5) years in duration, that allows them to reorganize their debts. The ultimate goal in Chapter 13 is the "confirmation" of the Chapter 13 plan but Chapter 13 also has more limited collateral benefits, in allowing a stay of creditors.
• Chapter 11 and Subchapter V of the Bankruptcy Code Chapter 11 is usually filed by businesses, or individuals with higher amounts of debt, to reorganize their finances. Subchapter V can be filed by smaller businesses. The ultimate goal in Chapter 11 and Subchapter V is "confirmation" of a plan of reorganization, but they also have more limited collateral benefits in allowing a stay of creditors.