Bankruptcy is a legal procedure initiated by a specific or a service that can not pay their debts and looks for to have the financial obligations discharged or restructured by the courts. The 3 most common types of personal bankruptcy proceedings are Chapter 7 individual petitions, Chapter 11 organization reorganization and rehabilitation petitions, and Chapter 13 wage earner's plans. Personal bankruptcy cases practically exclusively fall under federal law, though states might pass laws governing problems that federal law doesn't resolve. Unique bankruptcy courts across the country deal with only debtor-creditor cases. Usually, any bankruptcy-related claim should be filed with the U.S. Personal Bankruptcy Court. Terms to Know Insolvency Petition - The document submitted with the U.S. Insolvency Court that starts an insolvency proceeding; generally includes the debtor's assets, financial obligations, and other liabilities Chapter 7 (Individual Bankruptcy) - A petition submitted under Ch. 7 of the U.S. Bankruptcy Code for a specific debtor to liquidate his/her assets and settle or release debts Chapter 11 (Organization Reorganization) - A petition submitted under Ch. 11 of the U.S. Bankruptcy Code for an organization to rearrange its liabilities and assets, in addition to settle or discharge its financial obligations Chapter 13 (Wage Earner's Plan) - A petition submitted under Ch. 13 of the U.S. Insolvency Code where an insolvent debtor may ask the court to approve additional time for the debtor to settle his or her debts, so long as the debtor is making a steady earnings Insolvent - Unable to pay one's financial obligations as they come due Discharge - To release a debtor from his/her liability to pay a debt For more legal definitions, go to the Findlaw Legal Dictionary.Learn more about FindLaw's newsletters, including our terms of usage and privacy policy.
Although the majority of attorneys are free to demand permission to practice in U.S. Personal bankruptcy Court, effectively representing personal bankruptcy clients needs extensive understanding of the U.S. Insolvency Code. Attorneys Browse around this site without the proper experience might not know all of the choices available to a customer facing personal bankruptcy, and as a result, they might not be able to broker the most useful bankruptcy strategies.
Bankruptcy procedures can have long-term advantages and consequences for a person's financial and household situations. This is another factor why finding a knowledgeable lawyer is vital. A lawyer who has actually helped numerous clients through insolvency can better prepare you and safeguard your properties and reduce the unfavorable impacts. If you are dealing with insolvency, call a bankruptcy legal representative immediately to maintain your legal rights and explore your legal options.