Bankruptcy Laws The Basics

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The decision whether to file bankruptcy or not is a difficult one and a debtor should gather all relevant information and knowledge about the new and revised bankruptcy laws introduced basically to safeguard the true purpose of bankruptcy filing. Being bankrupt produces feelings of financial insecurities and sense of loss and self-pity; on top of that if one misinterprets the laws and terms, all hell would break loose on the debtor. At such junctures, bankruptcy lawyers play an important role in making the process clear and easier for the debtor to go through. Personal bankruptcy filing is a process that safeguards and debtors from al, their debts and dues and let them escape from the debt repayment process; however some slight differences are there between the chapter 7 and chapter 13 bankruptcies. Simply speaking, bankruptcy is a legal state that allows a person or a debtor to no longer owe the liabilities to pay towards any creditor or lender without the assistance of a court. The purpose of bankruptcy, however, is not to simply facilitate the payment of those debts. ...
... Often, that is at least part of the process. However, the ultimate goal of bankruptcy for individuals is to allow a person to enter a state in which that person is completely free of debt. In this sense, bankruptcy can be a way to give a person a completely fresh start. As such there are many forms of bankruptcy which pertains to business debts, but here we will restrict our article to matters related to individual financial conditions wherein, chapter 7 and chapter 13 bankruptcies play roles. About all these complications, a bankruptcy attorney will be the best person to guide you and thus he/she plays a significant role in the process.
One of the most important elements of a Chapter 7 bankruptcy is liquidation. Liquidation, in this instance, refers to a process by which a person’s assets are acquired by a bankruptcy court so those assets can be sold off. The proceeds from this liquidation are then used to pay back some or all of the debt that a person owes to creditors. Some people may be worried that all of their possessions could be sold off in liquidation as part of a Chapter 7 bankruptcy. But much of what a person owns can in fact be declared exempt from liquidation. The things that can be declared exempt vary from state to state, depending on a state’s bankruptcy laws. Chapter 13, unlike Chapter 7, is more of a reorganization of a person’s debts. During this process of Chapter 13 bankruptcy, an individual will work with appointed debt counselors. With these counselors, a person’s income, expenses, and debt will be reviewed and analyzed. From this analysis, a payment plan will be developed that will allow the person declaring bankruptcy to pay off his or her debts in a way that person can manage. The debtor should thus be aware of the relevant form of bankruptcy which would be applicable in his debt situations and should accordingly carry on actions.