posted by lawyersofmelbourne.com.au admin on Oct 31
If you are in serious financial trouble, with debts threatening to overtake you, you may have to file for bankruptcy. Bankruptcy is when you take legal action to declare yourself or your organization as being unable to repay debt. As a debtor, you would have to file for “voluntary bankruptcy” and will need a Detroit bankruptcy attorney for assistance. The bankruptcy law offers an opportunity for individuals who are caught in the credit quagmire to start anew by following the provisions spelled out in the said law. Your lawyer will instruct you on your best possible options according to the current laws.
There are five chapters under the Bankruptcy Code that any individuals or companies can apply which they think is appropriate. Filing under Chapter 7 would give a debtor a fresh start by eliminating all debts on an average of four months. You will lose possession of all your non-exempt property, otherwise known as your assets, to the bankruptcy trustee. Your liquid assets will be sold to become cash which will be used to pay off your creditors. After that, you will be released from any personal liability arising from your debts.
Chapter 9 is the relevant chapter concerning municipalities (which includecities, towns, counties, villages, taxing districts, school districts and municipal utilities) that are involved in heavy debts.
Chapter 11, otherwise known as ‘Reorganization,’ is the chapter in which businesses or their Detroit bankruptcy attorney may file under. Here, indebted firms can still continue with their operations but under a court-sanctioned reorganization plan.
Chapter 12 deals with ‘Adjustment of Debts of a Family Farmer with Regular Annual Income.’ Family farmers will find relief from debt in this chapter by being allowed to pay debt over a period of three to five years, as approved in court.
Finally, Chapter 13 or the ‘Adjustment of Debts of an Individual with Regular Annual Income,’ addresses individuals or consumers, and allows the debtor to repay the creditors based on future income over a period of three to five years. The difference between Chapter 13 and Chapter 7 is that as a debtor, you will be allowed to keep your assets, such as your home, while undergoing the plan. However, the repayment plan should be approved at a confirmation hearing in court, and will be judged on whether the plan fulfills all the requirements stipulated in the Bankruptcy Code.
There is more to bankruptcy laws than this outline provides, so it’s important to consult a Detroit bankruptcy attorney as early as possible. There are new provisions under the bankruptcy law which you can use to assist you in your financial difficulties. If you want to apply the liquidation bankruptcy clause under Chapter 7, you must be able to pass the strict financial means test. It’s also useful to remember that you should receive briefing from a credit counseling agency six months prior to filing your bankruptcy case. The Bankruptcy Code includes provisions that allows individuals to convert their Chapter 7 filing into Chapter 13 bankruptcy filing. You don’t have to be a victim of debt. A new beginning lies behind your trouble, provided you start early and get the necessary professional help.
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