When an individual or a business reaches the point where making payments to creditors that they are in debt to becomes impossible, the laws of the United States allows them to engage a bankruptcy lawyer in Royal Palm Beach and file for bankruptcy protection. An individual can file Chapter 7 bankruptcy which involves the cancellation of most debt as well as the disposal of most of their assets or they can File Chapter 13 which allows the individual to develop a repayment plan designed to pay down the current debt. When a business declares bankruptcy they can pray for either partial or complete cancellation of debt, in this way the business can continue to operate or it will close the doors, sell off all the assets in an effort to pay the debts.
As mentioned, there are two primary ways for an individual to declare bankruptcy; they are Chapter 7 and 13 of the bankruptcy code. Chapter 7 is referred to as “straight bankruptcy” or liquidation. The assets of the individual declaring bankruptcy are handed over to a court appointed trustee, the trustee liquidates the assets for as much as possible, the proceeds of the liquidation are used to pay down as much of the current debt that is possible with the total proceeds received. Not everything that the individual owns is liquidated, there are certain assets such as the primary home and vehicle that are exempt as long as the payments on them are up to date.
Chapter 13 bankruptcies are often called “wage earner” bankruptcy as it allows the individual to work with his or her bankruptcy lawyer in Royal Palm Beach to develop a plan which is acceptable to the court and the creditors to repay the debt interest-free over a fixed period, usually between three and five years. During this time the debtor is protected from any collection efforts that might be made by a creditor, it also protects all the assets against seizure for debt repayment. All the creditors are obliged to abide by the court approved terms of the repayment schedule. Regardless of what Chapter an individual uses when declaring bankruptcy, obtaining credit for up to ten years will prove difficult.
A business can seek protection under Chapter 7 just as an individual can or they can file for Chapter 11 protection. Chapter 11 is very similar to Chapter 13, the business must develop a plan to repay the debts over an agreed upon period of time.
It does not matter what Chapter an individual or company chooses when the declare bankruptcy but in all cases having a bankruptcy lawyer in Royal Palm Beach is almost mandatory because of the complexity of the rules.
If you find yourself burdened with debt that you simply cannot pay then you may elect to seek bankruptcy protection. In this event you are well advised to seek a bankruptcy lawyer in Royal Palm Beach.
