Bankruptcy is a last recourse to families and businesses who are in financial trouble. It provides much needed professional assistance in the process of mending the individual or business’ finances and their lives. Those who find themselves in this predicament, would greatly benefit from the counsel of a bankruptcy attorney who can educate you on the various types of bankruptcy, the most commonly filed chapters and the legal process itself.
Chapter 7 Bankruptcy
According to Experian, “chapter 7 bankruptcy, also known as a straight or liquidation bankruptcy, is a type of bankruptcy that can clear away many types of unsecured debts. If you’re far behind on your bills and don’t have the means to afford monthly payments and living expenses, filing Chapter 7 bankruptcy could be a last resort to help you reset your finances.” While it comes with downsides, such as losing some of your possessions and having your credit be negatively impacted, there are also upsides to the process. In it, the court will place an automatic temporary stay on debts which will stop collections, garnishing of wages, foreclosures, evictions, repossessions, and cutting off of utility services. This chapter is the most frequently filed in the United States.
Chapter 11 Bankruptcy
Bankruptcy Chapter 11 is often referred to as “reorganization bankruptcy”. Before proceeding with the filing, individuals or businesses are advised to assess whether doing so is truly necessary as it’s a complex and generally costly process. With this kind of bankruptcy, the company will usually remain in operation as the debts are restructured, and a plan that is beneficial to both debtors and creditors will be proposed by either party, though the individual or business filing is usually given the opportunity to suggest a reorganization plan first. A court appointed trustee could be appointed if the case is linked to fraud, dishonesty or possible criminal activity. Ideas to restructure could include downsizing business operations, renegotiating debts or liquidating all assets to repay creditors. If the court approves, the process moves forward.
Chapter 13 Bankruptcy
The final most popular bankruptcy chapter is 13. This chapter, according to the United States Courts, “is also called a wage earner’s plan [that] enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. Unless the court orders otherwise, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a schedule of executory contracts and unexpired leases; and (4) a statement of financial affairs.” Whether you choose to file chapter 7, chapter 11, or chapter 13, we encourage you to connect with a bankruptcy attorney in Tulsa, Oklahoma at Henson Law Firm for exceptional counsel and representation.
The Henson Law Firm, PLLC is located at:
601 S. Boulder, Suite 600
Tulsa, OK 74119
*We are a debt relief law firm in Tulsa, Oklahoma.
*We help people file for bankruptcy relief under the Bankruptcy Code.