Bankruptcy laws were enacted to provide relief to people who are so inundated with debt that they cannot meet their financial obligations. Through bankruptcy, a debtor (the person or company filing for bankruptcy) is able to work towards a fresh financial start by either liquidating their assets to eliminate debt or by reorganizing their debts.
The two most common types of bankruptcy are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 involves eliminating all of a debtor's unsecured dischargeable debts through liquidation. Dischargeable debts include credit cards, medical bills, utility bills, bank loans, certain tax debts, etc. Under Chapter 13 bankruptcy, all of a debtor's debt is restructured into a feasible payment plan, which the debtor is required to pay off in monthly installments within a three to five year period. While Chapter 7 and Chapter 13 bankruptcy protection are available to individuals, businesses can file for bankruptcy protection under
Chapter 11. Under Chapter 11, businesses and organizations can restructure their debt and pay back their creditors in installments. Furthermore, during the reorganization process, businesses can continue operations without having to worry about creditor harassment.
A successful bankruptcy filing can make a drastic difference in the life of a debtor. After a debtor has resolved their debts through bankruptcy, they will no longer be subjected to tiresome creditor harassment, or the constant stress and worry over having too much debt.
Understanding Bankruptcy Laws
Bankruptcy laws, which are defined in the Bankruptcy Code (Title 11 of the United States Code), are very complex, complicated, and difficult to understand. Therefore, if you think you need to file for bankruptcy, or if you are simply interested in learning more about bankruptcy, it's important to speak with an experienced bankruptcy lawyer as soon as possible. At Jacoby & Jacoby, we have a great deal of experience and practice in bankruptcy law, and have helped countless clients throughout Nassau and Suffolk file for bankruptcy protection. We understand how overwhelming and exhausting it can be to constantly worry over debt and finances, and we can provide you with the professional advice and experienced legal counsel you need to overcome your debts and achieve financial freedom.