Personal bankruptcy is a legal treatment initiated by a private or an organization that can not pay their debts and seeks to have the debts discharged or rearranged by the courts. The 3 most typical kinds of bankruptcy proceedings are Chapter 7 private petitions, Chapter 11 service reorganization and rehab petitions, and Chapter 13 wage earner's strategies. Personal bankruptcy cases nearly exclusively fall under federal law, though states may pass laws governing issues that federal law doesn't attend to. Unique insolvency courts across the country deal with just debtor-creditor cases. Generally, any bankruptcy-related claim must be filed with the U.S. Insolvency Court. Terms to Know Insolvency Petition - The document filed with the U.S. Insolvency Court that initiates an insolvency case; normally consists of the debtor's properties, financial obligations, and other liabilities Chapter 7 (Person Insolvency) - A petition submitted under Ch. 7 of the U.S. Insolvency Code for a specific debtor to liquidate his/her properties and settle or release financial obligations Chapter 11 (Organization Reorganization) - A petition submitted under Ch. 11 of the Additional reading U.S. Personal Bankruptcy Code for an organization to restructure its liabilities and properties, along with settle or release its financial obligations Chapter 13 (Wage Earner's Strategy) - A petition submitted under Ch. 13 of the U.S. Insolvency Code where an insolvent debtor might ask the court to give additional time for the debtor to pay off his/her financial obligations, so long as the debtor is making a consistent income Insolvent - Unable to pay one's financial obligations as they come due Discharge - To launch a debtor from his or her liability to pay a debt For more legal meanings, check out the Findlaw Legal Dictionary.Learn more about FindLaw's newsletters, including our regards to usage and privacy policy.
Although many attorneys are free to request permission to practice in U.S. Bankruptcy Court, successfully representing personal bankruptcy customers needs extensive understanding of the U.S. Insolvency Code. Lawyers without the appropriate experience may not understand all of the alternatives readily available to a customer facing bankruptcy, and as a result, they might not have the ability to broker the most helpful bankruptcy plans.
Bankruptcy procedures can have long-term benefits and effects for a person's financial and family scenarios. This is another reason that finding a knowledgeable attorney is important. A lawyer who has actually helped many customers through insolvency can better prepare you and protect your properties and lessen the negative results. If you are dealing with insolvency, contact a personal bankruptcy attorney immediately to preserve your legal rights and explore your legal alternatives.