Smithson Law Office:
* Bankruptcy is a method of getting control of the debt in your life and achieving a “fresh start.” An experienced bankruptcy attorney can maximize the amount of assets you keep as you go through this stressful process. It is not unusual for debtors to retain the vast majority of their assets.
* Federal law requires all creditors to immediately stop trying to collect on past debts as soon as the bankruptcy process begins. While those debts will not simply vanish, beginning the bankruptcy process can bring a sense of relief and renewal as your attorney begins to work with creditors and the trustee.
* Certain debts are generally not dischargeable in bankruptcy. These include student loan debts, child-support obligations, court-ordered restitution, taxes, and certain other debts. Consult a bankruptcy attorney to determine if bankruptcy is right for your situation.
* The two primary types of bankruptcy for individuals and families are Chapter 7 and Chapter 13. Chapter 7 is the classic “wipe the slate clean” bankruptcy option where certain debts are discharged outright. Chapter 13 allows a reorganization of debts owed, generally stretching payments over a three to five year plan. Each option has its advantages and drawbacks. Consult a bankruptcy attorney to determine what option is right for you.
* Also note that many businesses that wish to continue to operate do so under Chapter 11 of the Bankruptcy Code, to allow that business’ debts to be reorganized with creditors. An experienced bankruptcy attorney can help a business owner determine if this is the right option for their situation.
* You will be required to list all assets and debts upon filing for bankruptcy. Many debtors try to hide assets or ignore debts. This generally backfires, as upon finding the missing information, the debtor is out of luck in discharging a debt or retaining those assets. An honest accounting maximizes your opportunity to retain your assets.
The information provided here is meant to be general and instructional, and does not constitute legal advice. For specific consideration of your individual circumstances, please consult a local attorney.