Bankruptcy Law is Federal Law under Title 11 of the United States Code. You have heard of Chapter 7, or Chapter 11, or Chapter 13. Those are actual chapters “in the book” of the Bankruptcy Code. The Bankruptcy Code was created with the specific intent to help people who can no longer pay their debt, and are suffering as a result.
A Chapter 7 bankruptcy is applicable to both corporations and individuals. In a corporate environment, a Chapter 7 bankruptcy is a liquidation. In the simplest terms, the assets of the corporation are sold to pay creditors pursuant to a priority system.
In a personal Chapter 7 bankruptcy, there is no liquidation of the individual. Individuals are allowed to keep personal property, known as exemptions, move forward and get a fresh start. Exempt Property can include cash, household goods, tools of trade, cars, a home and other types of property.
A Chapter 13 bankruptcy is applicable to individuals who are able or required to repay all or some of their debt through an interest-free payment plan over a period of time not to exceed five years. Often individuals file a Chapter 13 bankruptcy when they have fallen behind in mortgage payments and wish to keep their house but cannot afford to make up the past-due amount in a lump sum payment. A Chapter 13 bankruptcy may be required where an individual’s income exceeds expenses, or exceeds a certain amount based on a formula known as the “Means Test,” which considers the home address of the debtor and family size.
Jay A. Weinberg has been involved in representing debtors and creditors in Bankruptcy since 1989. Jay Weinberg will provide a detailed consultation regarding whether bankruptcy would be useful for you.
Most individuals who file Bankruptcy are allowed to keep all of their current property and can obtain credit in the future. There is no minimum amount of debt required in order to be eligible to file for Bankruptcy. All debt must be listed on a Bankruptcy petition. There are many additional questions which we can answer for you in the course of a consultation.
Bankruptcy is a serious decision and you need a meaningful consultation to see if it is right for you. Please call Jay Weinberg to discuss your situation.