Bankruptcy Laws

Bankruptcy laws and practices are mostly governed by federal laws. Bankruptcy is meant to give individuals and businesses a chance for a fresh start following financially difficulties. The laws are also designed to ensure that everyone receives fair treatment from creditors.

Types of Bankruptcy

There are four main types of bankruptcy: chapter 7, chapter 11, chapter 12 and chapter 13.  Chapter 7 is the most common form of bankruptcy among individuals, married couples, corporations and partnerships. It involves a liquidation proceeding where your non-exempt assets (if you have any) are sold by the trustee who then pays your creditors accordingly.

Chapter 11 benefits corporations and partnerships acting more as a reorganization proceeding.  You maintain control of your assets and can continue operation your business although you are subject to the decisions of the court and creditors committee.

Chapter 13 is a repayment plan designed to meet the needs of individuals with an income and unsecured debt totaling less than $336,900 (less than $1,010, 650 of secured debt. You have the option of keeping your property and resuming regular payments to the appointed chapter 13 trustee over a three to five year period of time. Chapter 12 is similar to chapter 13. The difference is that chapter 12 bankruptcy laws is a reorganization plan targeting family farmers.

Bankruptcy Laws and Discharge

If you are granted discharge according to bankruptcy laws, it means that you are released from being liable for certain types of debt. The law prevents creditors from any attempts to communicate with you to collect a debt.

Is Bankruptcy the Right Solution for You?

Filing for bankruptcy is not something that should be taken lightly. It’s important to know all the facts as well as the consequences of this action. In some cases there are no clear signs indicating that filing bankruptcy is the best option. A few signs that this is an option to consider include:

• Your inability to pay more than the minimum amount owed on your bills
• Being unable to pay your way out of debt in the next five years
• Receiving calls from creditors about past due and unpaid bills
• Dealing with a sever financial setback like loss of job, divorce or an unexpected medical emergency

It’s important to keep in mind that bankruptcy can affect your credit rating. If you need to get a car, home or other loan, you may find yourself facing higher interest rates. It can red flag you as a credit risk. A bankruptcy remains on your credit rating for 10 years.

Finding an Attorney

Consulting with a lawyer is the best way of understanding bankruptcy laws and how they may affect your own financial situation. Talking to a Syracuse bankruptcy attorney is also a good idea  because New York  has its own bankruptcy laws. Craig Humpleby can help you determine whether or not bankruptcy is the best option for you. If it’s not, then he can suggest alternative solutions instead. Click here to get your FREE phone consultation now.