Bankruptcy is a common legal action in today’s society. People overspend on their credit cards, sustain a catastrophic financial loss or have a great deal of medical debts that they can’t pay back. There are three kinds of bankruptcy to consider. The first is Chapter 7 bankruptcy, in which individuals cannot pay back their debts and have so little money that they can never hope to pay back the monies they owe. The Chapter 7 judge makes sure that the individual is completely unable to pay back their debts and the debts are completely cleared. The debtor does not have to pay back anything due to extreme poverty. The person then suffers from a poor credit rating for a very long time but can gradually build their credit rating over time.
A Chapter 13 Bankruptcy situation also involves an individual rather than a business. In such cases, there is a restructuring of the individual’s debt. The debtor may make a sufficient sum of money or have a sufficient amount of property so that the judge involved in the case may request that the individual pay back a certain sum of the money, usually in monthly installments. After enough months have gone by, the remainder of the debt is forgiven. Chapter 13 bankruptcy is a way for creditors to get some kind of payment, even if it is not the entire amount.
Chapter 11 Bankruptcy involves insolvency of corporations or businesses. Companies declare Chapter 11 bankruptcy and work with the judge to decide how much money should be paid back and for how long before the remainder of the debt is forgiven. Most of the time, corporations have some funds and use those funds to pay back the various creditors. It is rare that no money is paid back to the creditors in this legal situation.
Everyone has debt and most people can handle the repayment of that debt over a period of time. This is especially true when the debt is low and the amount of money the person makes is sufficient. In order to avoid being in a great deal of debt, people avoid buying large ticket items and monitor their income and output carefully. Debt can, however, become very serious and there becomes no possible way to pay the debt back. In such cases, the individual (or corporation) must file for bankruptcy with the bankruptcy court. You also need a bankruptcy attorney. When you speak with the attorney, a decision is made as to whether the debt is likely to be completely forgiven or whether you are doing a restructuring plan and will be paying back a portion of the debt using monthly payments sent to the trustee of the bankruptcy. Individual voluntary arrangements can be made with the creditors to more informally pay back the debt, usually on a monthly basis.
The bankruptcy attorney will help the individual decide whether or not bankruptcy is the right thing and which chapter of bankruptcy is the best decision. The bankruptcy attorney helps you in bankruptcy court and speaks on your behalf when it comes to how much money you have, what your assets are and how you got into this debt in the first place. The judge decides whether or not to use Chapter 7 or Chapter 13 bankruptcy is appropriate and sets out payments in a Chapter 13 situation. If chapter 7 is more important, the judge makes that decision and forgives the loan in its entirety. The creditors receive nothing in return. Even though you have no money, you must have enough money on hand to pay for the bankruptcy attorney. This money must be paid in advance of the work the attorney does for you. For More Information Visit: Employment Tribunal Solicitor
