Filing for bankruptcy is really that last straw in regards your business or personal finances. It’s that area you’ve hit where you have absolutely no other option than to default on your Creditors and pack up. It’s also a pretty awkward task if you approach it without legal help as there are two forms of bankruptcy. The most popular form for most companies is a ‘Chapter 7′ bankruptcy. This is a direct liquidation bankruptcy. There is also ‘Chapter 13′ bankruptcy with which a means test is organized on the individual and a repayment plan is set up in order to repay Creditors.
Obviously the easiest form when it comes down to how to file for bankruptcy is the direct to liquidation ‘Chapter 7′, but recently the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), has made it quite harder to file Chapter 7, and forces many people to go down the route of Chapter 13. No matter what route you would like to take however, it is advised that you never proceed in a bankruptcy clame without firstly having the legal council of a seasoned bankruptcy lawyer. Do not attempt to go it alone without legal aid as things may become quite messy.
An indebted individual, also referred to as an insolvent debtor is one who is unable to meet their financial obligations and repay the debts owed. They will then need to know how to file bankruptcy papers and seek the courts protection against their creditors.
Insolvent individuals need to remember there are actions that can be taken by their creditors some of which could be drastic. Creditors have a right to seek redress in court and have the court force the debtors to repay the debts owed. This is why it is important to seek the court’s protection early. Those that do will receive the court’s protection. Even as a debtor is protected from insolvency, the courts also provide for the creditors. The court is likely to come up with a program that will see the indebted individual avoid harsh or stiff plans by creditors which may include calling in a collections team as well as garnishing wages.
Working and consulting a debt lawyer is one of the best ways to seek legal advice on how to file bankruptcy at the courts. Many insolvent individuals have successfully turned around their situations after successfully petitioning the courts to protect them. Filing for bankruptcy is filed under various chapters such as chapters thirteen and seven.