Financial troubles can happen to anyone. If you are drowning in debt, personal or corporate bankruptcy can help you get a fresh start.
This post will discuss the different types of bankruptcy available to businesses and individuals. We’ll also discuss how bankruptcy lawyers can help your bankruptcy claim.
The Importance of Filing Bankruptcy
Bankruptcy is the process where individuals and businesses can get help when they can’t pay their debts. The federal courts handle the bankruptcy process in the U.S. They use rules outlined in the U.S. Bankruptcy Code. Bankruptcy helps people and corporations get a fresh start by liquidating their assets or creating a payment plan.
Filing for bankruptcy can stop collections agency calls, lawsuits from creditors, loss of personal property, and wage garnishment. Bankruptcy can help you stop legal suits against you, get rid of your debts and help you start fresh. There are many types of bankruptcy. You need to understand the different types and the benefits or complications of each. A bankruptcy lawyer can help you determine which bankruptcy claim chapter suits your needs.
What is Personal Bankruptcy?
If you owe more than $1000, you can file for voluntary bankruptcy. If you are the sole proprietor of your business, the law sees no difference between your personal and business assets.
Individuals who file for personal bankruptcy have two choices. They can file under Chapter 7, which is for individuals with little or no income and no hope of repaying their debt. Chapter 13 helps individuals with some income manage their debts. It helps them improve their financial situation often with a payment plan.
Individuals filing under chapter 7 or chapter 13 personal bankruptcy have to go through a means test. The means test will determine their assets and liabilities. In personal bankruptcy, you also may be able to keep your home and, in most cases, your car. Usually, you can keep your monthly income, but you need to pay 50% of any surplus income you make to your creditors.
What is Corporate Bankruptcy?
Corporations are considered legal entities. The owner’s debts and assets are separate from the business’s debts and assets in this situation. Corporations can also file under chapter 7, which will dissolve the corporation.
If a corporation files under Chapter 11 corporate bankruptcy, it can reorganize the organization or liquidate the assets to pay the debts. If they reorganize this may involve shutting down or selling divisions of the company. Creditors need to approve the reorganization plan put forward by the corporation.
Legal Help for Personal vs. Corporate Bankruptcy
If you are considering corporate or personal bankruptcy, finding experienced bankruptcy lawyers is highly recommended. While you can file for personal bankruptcy on your own, it is essential to remember that a bankruptcy claim is a complicated endeavor and comes with high risk and long-term consequences. Personal bankruptcy can affect your long-term credit and your income. It is a decision you should not take lightly.
A bankruptcy lawyer can help you find the best course of action for your claim. The bankruptcy laws are complicated and constantly changing. You need to have someone who can explain the laws and how they will affect your case. It helps to have experienced legal help on your side for your bankruptcy claim.
If you need help finding an experienced and trustworthy bankruptcy attorney, contact LegalASAP. We can help connect you with a network of bankruptcy lawyers in your area who are available to help with your case.