Insolvency is a legal treatment initiated by an individual or an organization that can not pay their financial obligations and seeks to have the debts released or rearranged by the courts. The three most typical kinds of bankruptcy procedures are Chapter 7 individual petitions, Chapter 11 company reorganization and rehab petitions, and Chapter 13 wage earner's strategies. Personal bankruptcy cases nearly specifically fall under federal law, though states might pass laws governing concerns that federal law does not resolve. Unique personal bankruptcy courts across the country manage just debtor-creditor cases. Generally, any bankruptcy-related claim must be submitted with the U.S. Insolvency Court. Terms to Know Bankruptcy Petition - The document filed with the U.S. Insolvency Court that initiates a bankruptcy case; typically contains the debtor's properties, debts, and other liabilities Chapter 7 (Person Insolvency) - A petition filed under Ch. 7 of the U.S. Personal Bankruptcy Code for a private debtor to liquidate his or her possessions and settle or discharge financial obligations Chapter 11 (Company Reorganization) - A petition filed under Ch. 11 of the U.S. Personal Bankruptcy Code for a company to restructure its liabilities and possessions, as well as settle or release its debts Chapter 13 (Wage Earner's Strategy) - A petition filed under Ch. 13 of the U.S. Bankruptcy Code where an insolvent debtor might ask the court to grant extra time for the debtor to pay off his/her debts, so long as the debtor is earning a consistent income Insolvent - Not able to pay one's debts as they come due Discharge - Click for more To launch a debtor from his or her liability to pay a financial obligation For more legal meanings, visit the Findlaw Legal Dictionary.Learn more about FindLaw's newsletters, including our regards to usage and personal privacy policy.
Although many lawyers are free to request approval to practice in U.S. Insolvency Court, efficiently representing insolvency clients requires extensive knowledge of the U.S. Personal Bankruptcy Code. Attorneys without the correct experience might not understand all of the choices available to a client dealing with insolvency, and as a result, they might not be able to broker the most advantageous personal bankruptcy plans.
Personal bankruptcy procedures can have long-lasting benefits and consequences for a person's monetary and household circumstances. This is another reason why finding a knowledgeable legal representative is vital. An attorney who has helped lots of customers through bankruptcy can much better prepare you and protect your possessions and minimize the unfavorable results. If you are facing personal bankruptcy, get in touch with a personal bankruptcy lawyer right away to protect your legal rights and explore your legal options.