Bankruptcy Law- An Introduction to the Savior

Every US citizen is lawfully protected under the bankruptcy law. However, governed by federal law, the procedure of filing bankruptcy is a tricky one!

On the face of a failure to meet financial obligations, there is a scope of being excused from the entire or partial repayment of debt under the law. Going through the entire process is quite an impossibility without the support of an experienced Bankruptcy lawyer. The intricate process initially incorporates submitting a petition and fee to the bankruptcy court, followed by a court hearing in order to review the petition containing the amount of debt, income and expenses of the debtor along with a complete list of their asset.

The law is categorized under two sections- liquidation and reorganization. In the prior, debtors are expected to surrender their assets which is sold off to extend the proceeds to creditors, thus discharging him of all debts. Whereas, in the latter, debtors are allowed to retain their property, but in return they have to sign off an agreement that pledges to repay creditors the amount they owe in due installments.

Liquidation bankruptcy, under Chapter 7, is commonly referred to. Under this, the assets are liquidated to meet the creditors claim to the extent it can, forgiving the debtors loans and obligations. Post completion of the legal procedure and pay offs, creditors can be penalized if they continue trailing the debtor with further demands.

Although Chapter 7 is in most circumstances the rational man’s choice, in case the debtor expresses the wish to make an attempt to pay off the bills, he is directed by the legal expert to file his claim under Chapter 13 signifying reorganization that encapsulates mortgages, student loans and taz liabilities.. This section boasts of its own merits besides allowing the debtor to retain his assets. Secured debts like a car loan can be restructured through reducing its principal to the current market value of the loan collateral and expanding the span of repayment up to 60 months.

Chapter 7 restricts an individual or corporation to file bankruptcy only ones in 8 years, whereas Chapter 13 eases up the wait period to 6 years.

A trusted Long Island Bankruptcy Lawyer can introduce you to another lucrative alternative- Chapter 11 of the bankruptcy law. This particular section enables businesses to secure their assets from creditors in the entire course of planning a repayment- which is equivalent to reducing liability and restructured, offering businesses another scope to bounce back with profits and pay off the dues.

A speck of error in the course of the litigation might cost you big considering the stakes involved. Therefore, it is an utmost essential for every debtor resorting to bankruptcy claim to be well versed with the regulations and hire the services of a reliable legal advisor who can be the ultimate guiding light.

Jonathan S Bodner is an acclaimed bankruptcy lawyer associated with a trusted law firm based in Long Island. He shares his insight to combat bankruptcy through the article.