Bankruptcy

The National Loan Relief Center understands that the decision to file bankruptcy is not an easy task. As experts in the field of bankruptcy law, our office will be sure to keep you informed on whats going on during this process.

As experts in the field, we understand that many bankruptcies are caused by separation, business failure, health problems or, in today's economy, mortgage related distress. Our goal is to improve your overall financial picture with the least amount of frustration and confusion possible.

Here are the type of Bankruptcies that we file on behalf of our clients:

Chapter 7

Chapter 7 bankruptcy is the type of filing that comes to mind for most people. A chapter 7 bankruptcy provides for the "liquidation" of a debtor's property and the fair distribution of remaining proceeds to a filer's creditors.

Many changes have been made in regards to eligibility requirements for chapter 7 bankruptcy recently. Credit counseling is now a mandatory requirement for all chapter 7 bankruptcy filers and under certain circumstances, you may not be able to file for a chapter 7 bankruptcy if you recently dismissed another bankruptcy case or failed to appear in court during a bankruptcy filing.

While chapter 7 allows for the liquidation of almost all debts there is no guarantee that all of your outstanding debts will be liquidated. Moreover, creditors have an opportunity to voice their opinions in court as well.

While guidelines for filing chapter 7 bankruptcies have become a bit stricter, many clients are still able to qualify.

Chapter 11

A Chapter 11 bankruptcy, unlike chapter 7 and 13, is a mode of bankruptcy filing for corporations and partnerships in general. Chapter 11 bankruptcies allow for the reorganization of a business and the negotiation of a repayment plan for the businesses creditors over time.

One of the principle benefits of chapter 11 filings for corporations and partnerships, in most cases, is that the personal assets of shareholders are not at risk in the filing of bankruptcy. However, there are limitations for personal asset protections if you operate a sole-proprietorship.

A plan of reorganization will need to be filed with the court that meets specific legal criteria. Acceptance of the reorganization plan will enable the corporation to begin the repayment of its debts. The chapter 11 bankruptcy terminates in the discharge period wherein payments on a regular and scheduled basis are made to creditors.

Chapter 13

Chapter 13 bankruptcy differs from chapter 7 in that the "liquidation" of debts is not the goal but instead, the adjustment or modification of debts to meet the filer's needs is taken in to consideration. The easiest way to conceive of a chapter 13 filing is that of a repayment plan. Your repayment plan can be for three to five years depending on the circumstances of your case.

Payments to your creditors are made via a trustee, that is, an agent appointed by the court. You will make your installment payments directly to the trustee for the duration of your repayment plan. While chapter 13 bankruptcy does not completely liquidate your debts, it does provide you with an alternative to ongoing financial hardships and relentless collection calls from creditors. Moreover, Chapter 13 bankruptcy provides for foreclosure relief as well.

Bankruptcy is a state of a person or a firm unable to pay off the debts. In legal terms, bankruptcy refers to the settlement of liabilities of a person/organization, fully or in parts, who are in a state of not able to meet the incurred financial obligations. The purpose of such a settlement is to uniformly distribute the bankrupt's assets equitably among the creditors, and, to relieve the debtor from further liability (in most cases). In the US, bankruptcy is governed by a federal law adopted in 1898 and amended many times, as by the Bankruptcy Reform Act of 1978 and recently in the spring of 2005.
The two purposes of bankruptcy are:
- To give creditors a fair share of the money that one can afford to pay back.
- To give the debtor, a fresh start by discharging his/her debts.

But bankruptcy, as one expects, has its drawbacks. But there are some limited advantages as well. Bankruptcy is more broad a term than finally putting an end to harassing debt collectors and creditors. Let us see few of the benefits that can be exploited out of a potential case of bankruptcy.
There are certain debts that are not cleared by bankruptcy. This includes court fines, HECS debts, child support payments, debts incurred by fraud, student loans. Even after declaring one bankrupt, these dues need to be paid back in regular terms.