Bankruptcy is a legal treatment initiated by a private or an organization that can not pay their debts 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 rehab petitions, and Chapter 13 wage earner's strategies. Personal bankruptcy cases almost exclusively fall under federal law, though states may pass laws governing problems that federal law does not resolve. Unique bankruptcy courts nationwide deal with just debtor-creditor cases. Normally, any bankruptcy-related claim needs to be submitted with the U.S. Personal Bankruptcy Court. Terms to Know Bankruptcy Petition - The document filed with the U.S. Bankruptcy Court that initiates a bankruptcy proceeding; typically includes the debtor's possessions, financial obligations, and other liabilities Chapter 7 (Person Personal Bankruptcy) - A petition submitted under Ch. 7 of the U.S. Bankruptcy Code for an individual debtor to liquidate his or her possessions and settle or discharge debts Chapter 11 (Company Reorganization) - A petition filed under Ch. 11 of the U.S. Insolvency Code for a company to rearrange its liabilities and possessions, in addition to settle or discharge its debts Chapter 13 (Wage Earner's Plan) - A petition filed under Ch. 13 of the U.S. Insolvency Code where an insolvent debtor may ask the court to grant additional time for the debtor to pay off his/her financial obligations, so long as the debtor is making a constant earnings Insolvent - Not able to pay one's financial obligations as they come due Discharge - To launch a debtor from Additional resources his or her liability to pay a debt For more legal definitions, visit the Findlaw Legal Dictionary.Learn more about FindLaw's newsletters, including our terms of usage and personal privacy policy.
Although a lot of legal representatives are totally free to request permission to practice in U.S. Personal bankruptcy Court, efficiently representing insolvency clients needs extensive understanding of the U.S. Insolvency Code. Attorneys without the proper experience may not understand all of the alternatives readily available to a customer dealing with insolvency, and as a result, they may not be able to broker the most beneficial bankruptcy plans.
Personal bankruptcy procedures can have long-term benefits and consequences for a person's monetary and family situations. This is another reason that discovering a skilled attorney is essential. A legal representative who has actually helped lots of customers through insolvency can better prepare you and protect your properties and lessen the negative results. If you are dealing with bankruptcy, call a personal bankruptcy attorney immediately to maintain your legal rights and explore your legal choices.