Bankruptcy    

This country was founded on the belief in new beginnings and second chances. If fact, many people who were in debt in England escaped to the United States for a fresh start in life. Thus, it is not surprising that the founding fathers gave the federal government the power to create bankruptcy laws in the Constitution. Over the last 200-plus years, the country’s bankruptcy laws have developed into what they are today. Today, approximately 1.5 million people in the United States get a fresh financial start to life each year by filing for bankruptcy.

Several types of bankruptcies are available. The most common type is Chapter 7, which allows an individual to eliminate all or most debts completely. A corporation may also use Chapter 7 if it wishes to go out of business.

If an individual does not qualify for a Chapter 7, he or she may look to Chapter 13 for relief. Chapter 13 allows the individual to make a payment plan to repay part or all of his or her debts over a period of up to 5 years. Chapter 13 is not available to corporations.

Individuals with significant assets and debts may need to file for Chapter 11 bankruptcy even though this option is most often used by corporations. Chapter 11 allows a corporation to remain in business and make a repayment plan for its debts.

Municipalities that are in debt may file for bankruptcy under Chapter 9. Small farmers in financial distress have Chapter 12 available for relief. Debtors with issues involving other countries should file for Chapter 15 bankruptcy.

If you are overwhelmed with bills, you can get immediate relief by filing for bankruptcy. The bankruptcy laws can stop creditors from harassing you, garnishing your wages, freezing your bank accounts, and foreclosing on your home. Once you have completed a Chapter 7 or Chapter 13 bankruptcy, you may not owe any debts. For more details, read the sections on Chapter 7 and Chapter 13 bankruptcies.

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