Bankruptcy is a relief provided by the government for people who are struggling financially. If you file for bankruptcy, you will have some breathing room to restructure your debts and eliminate some of your liabilities through bankruptcy discharge.

The United States Bankruptcy Code provides the guidelines of the proceedings which are regulated by the bankruptcy courts. The guidelines are used to determine the fundamental procedures for filing a bankruptcy petition. Moreover, the different types of bankruptcy, filing qualifications and costs of filing are stated in the guidelines.

One of the things that you need to fill out in your bankruptcy petition is claim for exempted assets. Every state has its own rules for bankruptcy exemptions of property. Furthermore, there are different amounts of exemption depending on the type of property.

There are different types of bankruptcy named for their chapters in the U.S. Bankruptcy Code. The chapters have distinctive features and are designed for specific situations. There are chapters that allow for an eradication of almost all debts, while some provide an opportunity to reorganize and pay off debts. There are chapters that are designed for individuals, and there are some chapters that are appropriate for business entities that are struggling with debt. The most commonly used chapters of bankruptcy are Chapter 7, 9, 11 and 13.  

Most bankruptcy cases are filed voluntarily, and there are only very few involuntary cases.  A voluntary petition is where an individual or business entity chooses to file for bankruptcy. The bankruptcy law also allows creditors to file for involuntary bankruptcy petitions on behalf of their debtors, provided that the creditors satisfy the requirements set by the U.S. courts.  The main purpose of filing involuntary bankruptcy for the debtors is for the creditors to get back all or some of the money owed to them.  But involuntary petitions can only be filed under Chapter 7 and Chapter 11.

Meanwhile, a voluntary petition can be filed under any chapters of the Bankruptcy Code. Most voluntary cases are filed under Chapter 7 and Chapter 13.  The decision to file under either Chapter 7 or 13 depends on your financial situation and qualifications to file under a particular chapter. Another factor in determining which chapter to file for are the consequences you will face during and after the bankruptcy process.

You may file for voluntary bankruptcy if your income is not enough to pay for your basic needs and debts. It is important to carefully plan a voluntary petition because bankruptcy has some major consequences, which includes losing certain assets and significant decline of credit score.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, commonly called the new bankruptcy law, requires all individuals filing for bankruptcy to comply with a pre-bankruptcy counseling session with an organization approved by the U.S. Trustee Program.

It is always recommended to consult a San Antonio Bankruptcy Attorney before petitioning for your own bankruptcy so you can be certain that you have considered all of the alternate options and that you are making the right decision

Leave a Reply.