Business Law Today

Many individuals will file for bankruptcy or consider doing so. However, in recent years there has been a significant change in bankruptcy law. Unsecured debt, such as credit cards, may not be discharged in bankruptcy proceedings. It is also good to keep in mind that there are various types of bankruptcy, thus bankruptcy law may vary by the state you reside in and the chapter of bankruptcy that you intend on filing.

There are two main types of bankruptcy for those filing on an individual basis. These are Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy law is typically for complete discharging of debt. Assets are usually liquidated in order to satisfy debts. Chapter 13 bankruptcy law works a little bit differently. It is more or less a repayment plan that the courts will help stipulate. Interest and fees on these debts may or may not be forgiven. However, if for some reason an individual becomes delinquent on these payments, they can be sued.

Bankruptcy is not free to file. There are court costs and attorney’s fees associated with filing. An individual can file bankruptcy without an attorney, however, this is not recommended. Bankruptcy law is subject to change and without a legal background, you may do more harm than good. The cost of filing bankruptcy will once again, greatly depend on where you reside.

Bankruptcy law will also maintain guidelines as to how often an individual may file bankruptcy. This is usually a number of years, being about seven or more. If during this time period you accrue mass debt, you won’t be able to file. The courts typically frown upon those who file for bankruptcy protection more than once and often will not be as kind in discharging debts the next time.

Bankruptcy law will allow protection from various debts. Some of these may include medical bills, utility and phone bills, loans, and credit card debt. Student loans are usually exempt from bankruptcy law except for a few special circumstances that most will not qualify for. Other debts that may not be protected by bankruptcy law may include delinquent taxes, court costs, and debts owed to the government.

Before deciding to file bankruptcy, or paying someone else to do this, make sure the debts in which you intend to include are protected by bankruptcy law. Most attorneys will offer a free consultation, take advantage of this. The attorney should be able to tell you whether or not your debts will be protected by bankruptcy law.

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