The three common forms of bankruptcy

by | Nov 10, 2014 | Lawyers


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The United States federal government has jurisdiction over the bankruptcy laws, the laws that establish the rules for declaring bankruptcy. All bankruptcy courts in the country are federal courts. A Henderson Nevada bankruptcy attorney is an individual who is trained and educated in all facets of the bankruptcy laws which primarily consists of legislative bills and statutes. Some laws made by judges do exist but they are mostly interpretations of the federal statutes that deal with the regulation of bankruptcy.

There are three primary forms of bankruptcy in the United States; the laws pertaining to these methods of declaration differ. Depending on the debtor’s status, either Chapter 7, 11 or Chapter 13 bankruptcy will be most often declared. In most cases a business will declare bankruptcy under Chapter 11 whereas individuals, depending on the circumstances, can declare Chapters 7 or 13.

These laws come into play when a debtor wishes to have his or her debts forgiven. Just wanting to declare bankruptcy and being allowed to do it are two different things under federal law, a person must be in a position to prove with certainty that the amassed debt cannot be paid. The petition is usually left to the Henderson Nevada bankruptcy attorney who files on behalf of his or her client.

When making a declaration of bankruptcy all the debts that will be included in the petition must be lodged. The debtor must also prove any source and amount of income. Any and all creditors are free to go to the bankruptcy court to make claims against the bankrupt’s assets or to dispute the bankruptcy.

The individual who declares bankruptcy may be directed by the court to dispose of assets in order to pay a certain portion of the accumulated debt. The court is responsible for distributing any money that the individual declaring bankruptcy has. The order in which creditors are paid from the available assets is laid down in bankruptcy law.

The Henderson Nevada bankruptcy attorneys – at Law Office of Hayes and Welsh will advise the client on which Chapter to file as the federal law mandates certain provisions. Individuals who have an income which is greater than the line indicating poverty usually are forced to declare Chapter 13 and not 7. In Chapter 13 bankruptcy, not all the debts are forgiven, the judge in federal court will establish a repayment plan and schedule for a portion of the debts owed, this schedule is determined by federal law.

If you are a creditor of an individual or business that is going into bankruptcy your concern will be collecting the money you are owed. You are advised to contact a Henderson Nevada bankruptcy attorney who can advise you of your rights and assist in resolving your problem. You are invited to contact the Law Office of Hayes & Welsh to discuss your situation.