What Is Bankruptcy and How You Can File for It

Man showing his empty pocketYour legal status as a bankrupt individual is determined by your incapacity to pay your debts. Your creditors can take legal actions against you, so you have to prepare yourself.

To help you in this kind of case, you’ll need a bankruptcy attorney in Sandy, like Osmond and Cockayne Associates. While it’s not required, a bankruptcy attorney has the legal knowledge that can help you properly handle your case.

The Bankruptcy Case

A bankruptcy case can help you repay debts or get rid of it altogether. It begins after you file a petition with a bankruptcy court. You can file your petition with your spouse or as a group with your company, organization, or other entities that you belong with.

However, before filing a petition, you will be required to attend credit counseling by state-approved counselors. This should be accomplished six months before the filing.

State courts do not handle bankruptcy cases. Rather, as the US Bankruptcy Code outlines, you will face such cases in federal courts.

The Types of Bankruptcy Cases

The US Bankruptcy Code defines different types of bankruptcies according to the debtor’s case and affinity. Although all bankruptcy cases are apart from one another, they are categorized with general considerations.

Individuals and businesses may file for Chapter 7 bankruptcy to pay part of their debts by liquidating assets through a bankruptcy trustee. To reorganize finances and repay debts, municipalities or local government units can file for Chapter 9 while business can file for Chapter 11 bankruptcy.

While Chapter 13 bankruptcy enables individuals to repay debts, Chapter 12 allows families of fishers and farmers to acquire relief from debt. Lastly, there’s Chapter 15, which is a case for bankrupt foreigners living on US soil.

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Filing a Bankruptcy Case

To file your case, you should be aware of the different form series that you should use. Married couples, sole proprietors, and individuals should use the 100 series form. Groups such as companies, partnerships, and corporations, and others should use the 200 form.

If all these seem hard to understand, seeking the help of a qualified bankruptcy attorney in Sandy can make things clearer for you. Remember, filing for bankruptcy has its long-term legal and financial consequences that you have to face. Having a lawyer can help you understand everything.