Personal bankruptcy is a legal treatment started by an individual or a company that can not pay their debts and looks for to have the financial obligations released or reorganized by the courts. The three most common types of insolvency procedures are Chapter 7 specific petitions, Chapter 11 organization reorganization and rehabilitation petitions, and Chapter 13 wage earner's plans. Bankruptcy cases practically solely fall under federal law, though states might pass laws governing problems that federal law does not resolve. Unique bankruptcy courts across the country handle only debtor-creditor cases. Generally, any bankruptcy-related claim must be filed with the U.S. Insolvency Court. Terms to Know Bankruptcy Petition - The document filed with the U.S. Insolvency Court that initiates an insolvency proceeding; normally 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. Personal Bankruptcy Code for a specific debtor to liquidate his/her properties and settle or release financial obligations Chapter 11 (Organization Reorganization) - A petition submitted under Ch. 11 of the U.S. Personal Bankruptcy Code for an organization to restructure its Click for more liabilities and properties, along with settle or release its financial obligations Chapter 13 (Wage Earner's Strategy) - A petition submitted under Ch. 13 of the U.S. Insolvency Code where an insolvent debtor might ask the court to give extra time for the debtor to pay off his or her debts, so long as the debtor is earning a steady income Insolvent - Unable to pay one's financial obligations as they come due Discharge - To launch a debtor from his/her liability to pay a financial obligation For more legal meanings, go to the Findlaw Legal Dictionary.Learn more about FindLaw's newsletters, including our terms of use and privacy policy.
Although most lawyers are free to request approval to practice in U.S. Personal bankruptcy Court, successfully representing personal bankruptcy customers requires thorough knowledge of the U.S. Bankruptcy Code. Lawyers without the correct experience might not know all of the options available to a customer dealing with insolvency, and as a result, they may not be able to broker the most advantageous personal bankruptcy strategies.
Insolvency proceedings can have long-term advantages and effects for a person's financial and family situations. This is another reason discovering a skilled lawyer is essential. A lawyer who has actually assisted numerous clients through bankruptcy can much better prepare you and secure your possessions and reduce the unfavorable results. If you are facing bankruptcy, call a personal bankruptcy attorney instantly to preserve your legal rights and explore your legal alternatives.