The federal bankruptcy code can be often hard to understand. It’s important (and in some cases required) that you hire a competent bankruptcy attorney who can guide you through the process.
Does bankruptcy code require my belongings to be liquidated?
Most of the filings are liquidations, and they come under Chapter 7. Chapter 7 bankruptcy usually involves the trustee to sell all non-exempt assets, and the funds made are distributed among the creditors. For individuals, the court might discharge any of the remaining debt. For businesses, the operation is shuttered.
What about reorganization?
Creditors often have a better chance for being repaid under Chapter 11 and Chapter 13. Chapter 11 bankruptcy is used more by businesses and those with high incomes or complex debts. Chapter 13 bankruptcy is more for individual consumers. Either way, debtors who file under these chapters agree to repay the debts according to a court approved schedule.
How about voluntary and involuntary bankruptcy?
Most of the filings are filed voluntarily by debtors. After you file, debt collectors are forbidden to contact you and repayment is decided by the court. Creditors, however, have the option of forcing the debtor(s) into involuntary bankruptcy, but this is done when a number of creditors petition the court, which will determine whether they are entitled to relief.
New York bankruptcy attorney Michael Kanzer of Kanzer and Associates can assist you with all these issues. Enlist his services today by visiting www.KanzerLaw.com.
