During difficult economic situations, an individual or a business firm often faces the problem of being grounded by huge debts. A person files a bankruptcy case when he is not left with any other option and cannot find any way to repay his creditors.
Factually, bankruptcy is the disability of an individual to pay his creditors. If an individual or a business chooses to file a bankruptcy case, he should hire a good bankruptcy lawyer. Understanding the legal ramifications of a bankruptcy is not easy. Bankruptcy lawyers would be able to give you a fair idea about the whole process.
The two most commonly-preferred bankruptcy options are:
Chapter 7 – This form of debt relief provides a debtor the option of eliminating all his debts by giving away his non-exempt property to the bankruptcy trustee (a person assigned by the court). The latter will convert the assets into cash and pay off the creditors. The determination of exempt and non-exempt property varies from state to state. It is better to consult a lawyer to know the details. This option of bankruptcy is often called ‘liquidation of assets’. This is helpful for those who do not have any expensive asset.
Chapter 13 – This option allows the debtor to keep his property to himself and paying off the debt in a time period of 3-5 years to pay off his creditors. This option is also referred to as ‘reorganization bankruptcy’. Everyone cannot opt for this option as it requires the debtor to pay a portion of his debt and prove that he stands in a position to pay off his remaining debts after the given amount of time. The court will check whether his income is enough for him to pay off his creditors later.
Both these options have their own eligibility criteria. Experienced bankruptcy lawyers will be able to analyze your case particularly and decide which option is eligible for you. Always make sure that your attorney has enough qualifications in the field to give you expert guidance. Regulations on debts and assets differ from state to state. Hiring a specialized attorney can help you to understand the complexities. He will also assist you to fill up the legal paper-works and other formalities.
If you or your business is facing severe financial problems and thinking of filing a bankruptcy, take help of bankruptcy lawyers. Henderson NV citizens can contact Kupperlin-Law to get expert legal assistance.