Function: noun; the administration of an insolvent debtor's property by the court for the benefit of the debtor's creditors.
In the United States, bankruptcy has traditionally been looked down upon. This is why many people are afraid to pursue this option when they are deep in debt. With the American economy in a serious downturn and unemployment rates at an all-time high, more Americans are exploring and focusing on the benefits of bankruptcy.
For many American, bankruptcy is the light at the end of a stressful tunnel. With so many people facing ever increasing loads of debt, job loss, and foreclosure, bankruptcy is no longer frowned upon. In 2009, the United States Government reported that 1.4 million people filed for bankruptcy throughout the country. This marked a 32% increase from 2008, meaning that more people were left struggling in a tough economy. Over one million Americans, bankruptcy served as a solution where many:
Types of Bankruptcy
In the United States, the two (2) most common types of bankruptcy are chapter 7 bankruptcy and chapter 13 bankruptcy. Below, we have provided basic information about each type.
Chapter 7 bankruptcy: The most popular type of consumer bankruptcy, chapter 7 allows people to have their debt discharged if they meet eligibility requirements, complete counseling, and pass a state-issued means test. Once people have decided to file for chapter 7 bankruptcy, they may have to go through liquidation. During liquidations, people’s assets and valuable property are sold and the profit from the items is divided among their creditors. While liquidation is a definite drawback, chapter 7 is still ideal for individuals who are looking to eliminate debt.
Chapter 13 bankruptcy: This type of consumer bankruptcy is commonly pursued by people who are struggling with debt, but make too much money to qualify for chapter 7. Under chapter 13, individuals work with a court-appointed bankruptcy trustee and their creditors to create a reasonable debt repayment plan. This gives individuals a time span of 3 to 5 years to repay their debt to their creditors and helps people avoid foreclosure and liquidation.
If you are consumed by debt and in need of an effective solution, contact the Law Office of Marie F. Benjamin today to see if bankruptcy may be the best option for you. Call us at 407-492-8056 for a free consultation.
Overview of Bankruptcy
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