Bankruptcy is the term used to describe the legal status of organizations or persons that are insolvent. Meaning, they are incapable of paying off the owed debts to creditors. In the majority of jurisdictions, bankruptcy filing is carried out by court order that is typically initiated by those in debt.
This is not the only option for those who are insolvent. Therefore, this terminology is not the same as insolvency. In each country, there are different laws and regulations related to this practice.
In the past, those who were unable to repay the debts owed did not engage in this kind of filing bankruptcy. Instead, they were forced into debt slavery, where the creditor was able to recover losses through physical labor of the debtor. The first statute within English law related to this matter came with the Statute of Bankrupts in the 1540s.
The official code of this procedure includes six statuses: chapter 7, 9, 11, 12, 13 and 15. Chapter 7 bankruptcy is among the fastest and most easy forms available. It involves liquidation of businesses and individuals. Chapter 13 is also common among individuals who are filing.
This type of legal action is difficult to accept. However, this practice is designed to protect. One of the first steps in this process is making sure no other alternatives are available. This legal status will remain on credit files for up to ten years, even if this procedure, as a whole, will make a fresh start. Professionals recommend that some form of credit counseling be issued to debtors prior to putting up a case. This type of counseling is meant to assess and suggest other alternatives.
Some individuals opt to file without the aid of an attorney. But, it is recommended that lawyers be hired. Do research to find the ideal professional. It is beneficial to hire a firm that allows clients to have direct contact with the lawyer, especially when it comes to meeting with the professional to discuss the case. Fees for this will vary and some places will allow people to file for free, if the financial means are not available. Be sure to ask questions and get answers.
Bankruptcy filing is a life-changing process. Individuals and organizations that do not have the money to pay their debts off in full may be forced to take on this status. Although the action will stay on credit files for at least 10 years, it basically offers a new beginning. An attorney should be hired to aid people through the process.
James P. Griffin, Attorney at Law specializes in chapter 7 bankruptcy. Visit them online for details! (http://www.jpg3law.com/)
Key Facts Regarding Bankruptcy Filing
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