What is Bankruptcy ?
Bankruptcy is one of the several alternatives for financial distress. Bankruptcy is an opportunity for a debtor to emerge out of a financial crisis and start afresh every year, declaring for bankruptcy is simply a fact of life for millions of individuals living in the United States.
Bankruptcy law is federal law, authorized by Article I, Section 8, and Clause 4 of the United States Constitution. Title 11 of the United States Code, the Bankruptcy Code contains the substantive law of bankruptcy.
Generally, a debtor declares bankruptcy to obtain relief from debt, and this is accomplished either through a discharge of the debt or through a restructuring of the debt. Generally, when a debtor files a voluntary petition, his or her bankruptcy case commences.
Types of Bankruptcies
Chapter 7 is bankruptcy also known as straight bankruptcy; it is the simplest and quickest form of bankruptcy available.
Chapter 9 bankruptcy is the type of bankruptcy that is reserved for municipalities who reach financial trouble. It’s a federal mechanism for the resolution of municipal debts.
Chapter 11 bankruptcy known as corporate bankruptcy and is a form of corporate financial reorganization which typically allows companies to continue to function while they follow debt repayment plans.
Chapter 12 bankruptcy is designed for adjustment of debts of “family farmers” or “family fishermen” with regular annual income. It is known as Family Farmer Bankruptcy / Family Fisher man Bankruptcy to propose and carry out a plan to repay all or part of their debts.
Chapter 13 bankruptcy is designed for an individual who is unable to reimburse his /her debts. It enables individuals with regular income to develop a plan to repay all or part of their debts. It is also known as Wage Earner Bankruptcy.
Chapter 15 bankruptcy is for helping both debtors and creditors. Intension of this is to provide effective mechanism for dealing with bankruptcy debtors and helps foreign debtors to clear debts.
Chapter 7 and Chapter 13 are the efficient bankruptcy chapters often used by most individuals. The chapters which almost always apply to consumer debtors are chapter 7, known as a “straight bankruptcy”, and chapter 13, which involves an affordable plan of repayment. An important feature applicable to all types of bankruptcy filings is the automatic stay. The automatic stay means that the mere request for bankruptcy protection automatically stops and brings to a grinding halt most lawsuits, repossessions, foreclosures, evictions, garnishments, attachments, utility shut-offs, and debt collection harassment.
Naresh M. Gehi is an experienced bankruptcy attorney at Law with two offices located in Queens. For assistance in filing bankruptcy or if you have any questions regarding your debt problems and need help finding a solution, please call us for a FREE personal consultation at (718) 263-5999, or visit us on the web at http://www.nybankruptcyinfo.com You can initially hire us for as little as $100, and we will start working for you immediately.