Bankruptcy is a legal procedure initiated by a specific or a service that can not pay their debts and seeks to have the financial obligations discharged or reorganized by the courts. The 3 most common types of personal bankruptcy proceedings are Chapter 7 individual petitions, Chapter 11 organization reorganization and rehabilitation petitions, and Chapter 13 wage earner's plans. Personal bankruptcy cases practically exclusively fall under federal law, though states might pass laws governing problems that federal law doesn't resolve. Unique bankruptcy courts across the country deal with only debtor-creditor cases. Usually, any bankruptcy-related claim should be filed with the U.S. Personal Bankruptcy Court. Terms to Know Insolvency Petition - The file submitted with the U.S. Bankruptcy Court that starts an insolvency proceeding; generally includes the debtor's assets, financial obligations, and other liabilities Chapter 7 (Individual Personal Bankruptcy) - A petition submitted under Ch. 7 of the U.S. Bankruptcy Code for a specific debtor to liquidate his or her properties and settle or release debts Chapter 11 (Organization Reorganization) - A petition filed under Ch. 11 of the U.S. Personal Bankruptcy Code for a service to reorganize its liabilities and properties, in addition to settle or discharge its financial obligations Chapter 13 (Wage Earner's Plan) - A petition filed under Ch. here 13 of the U.S. Bankruptcy Code where an insolvent debtor may ask the court to approve extra time for the debtor to pay off his/her financial obligations, so long as the debtor is earning a consistent income Insolvent - Not able to pay one's debts as they come due Discharge - To launch a debtor from his or 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 legal representatives are totally free to request authorization to practice in U.S. Bankruptcy Court, successfully representing bankruptcy customers requires extensive knowledge of the U.S. Personal Bankruptcy Code. Attorneys without the correct experience may not understand 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 benefits and consequences for a person's monetary and family scenarios. This is another reason that discovering a skilled legal representative is important. A legal representative who has assisted numerous customers through insolvency can better prepare you and protect your properties and lessen the negative impacts. If you are dealing with insolvency, call an insolvency legal representative immediately to maintain your legal rights and explore your legal options.