Bankruptcy law is a federal legal process for debtors seeking to eliminate or repay their debts. It provides for a federal system of statutes and courts which permits debtors to place their financial affairs under the control of the bankruptcy court.  Bankruptcy law helps people who can no longer pay their creditors get a fresh start by liquidating assets to pay off debt or by creating a repayment plan. Bankruptcy law protects troubled businesses and provides for orderly distributions to business creditors through reorganization or liquidation. 

These cases are heard in specialized federal courts called bankruptcy courts. Bankruptcy laws are federally mandated, but each state has specific laws identifying exempt property, and the individual filing bankruptcy may choose whether to use the federal exemption or state exemption.

Personal bankruptcies are most commonly filed under Chapters 7 and 13. Chapter 7 allows individuals to eliminate much of their debt by liquidating non-exempt property to repay creditors, and Chapter 13 permits them to keep all of their property, but they must repay all or a portion of their debts over a set time period, most commonly three to five years.

Businesses may also file for bankruptcy under Chapter 7. However, if a company wants to stay in business, it must reorganize its debts and use business income to repay its creditors, most often under Chapter 11.

During bankruptcy proceedings, a court administers the property and assets of a person or business who owes money to others in order to pay off the debt. The business or person who owes money is referred to as the debtor, while the business or person who is owed money is called the creditor.  A bankruptcy lawyer or attorney can help in these proceedings, which can be either voluntary or involuntary.

Bankruptcy laws may be applied to individuals, municipalities, or businesses. Your attorney will help protect you or your businesses from the negative effects of bankruptcy and harassing creditors. We help you understand all of your options if you are deep in debt and considering bankruptcy.

If you think you need a bankruptcy lawyer or a bankruptcy attorney to help you deal with creditors and mounting debt, contact Lorden, Pastor & Lilly, PC for a free consult.

What are my options regarding bankruptcy?
Will I lose my house if I file for bankruptcy?

Bankruptcy is a legal process presided over by federal law. It permits individuals and businesses to legally reduce, restructure or completely wipe out their debts, provided they meet stringent and specific requirements. The ruling body of laws for the bankruptcy process can be found in Title 11 of the U.S. code, which delineates the federal statutes, the process and the courts that may oversee the legal procedures necessary to effect a bankruptcy.

The most common types of personal bankruptcies for individuals are Chapter 7, which allows debtors to wipe out many debts they’ve accumulated in exchange for giving up non-exempt property to be sold to repay creditors, and Chapter 13, which allows debtors to keep all of their property and repay all or a portion of their debts over three to five years. Businesses can file for Chapter 7 or Chapter 11 bankruptcy. Chapter 11 allows a company to reorganize its debt to stay in business and use business income to pay his or her debts.