Best Injury Lawyer

posted by Greg Thompson on Nov 29

Bankruptcy, in its inititial years, was formulated for the benefit of creditors. This gave power to the creditor to confiscate all the assets of the borrower to compensate for his loss. This method not only left the borrower penniless but also caused him to serving imprisonment. However, the system has been transformed a good deal over time. In present days, bankruptcy is normally filed by a lender who acknowledges his inability to repay his loans. This enables the debtor to conveniently re-organize his finances and attempt at partially paying off what he owes while continuing his business. The legislation that governs bankruptcy differs from country to country as well as from state to state. For instance, in the US follows a Bankruptcy Code according to which there are six different types of bankruptcy known as Chapters while Netherlands abides by the Dutch Bankruptcy Code. Again, Tampa Chapter 7, more commonly called straight bankruptcy, and Tampa Chapter 13, also known as Wage Earner Bankruptcy, may have legal implications that are different from those followed in other states of the US.

When a person files for Straight Bankruptcy, he or she is required to give up all properties that are free from taxes and other liabilities. The trustee handling the bankruptcy takes the proceeds from these assets and splits it among the creditors. This is how the debtor is relieved of a part of or the whole loan amount, as may be eligible aganst the proceeds acquired from the surrendered assets. The US bankruptcy laws allow a citizen to file for this type of bankruptcy just once in every eight years. Post the amendment made in the year 2005, the person applying must also undergo a test to find out whether he or she is eligible to file for this bankruptcy. Inability to pass this test leads to the rejection of the bankruptcy application and at times recommends Wage Earner Bankruptcy to the applicant. It is necessary to be advised by a competent bankruptcy attorney for finding the best way to deal with this situation.

As is evident from the name, Wage Earner Bankruptcy is meant for those who have a steady flow of income. Under this type, the debtor is required to go for a repayment plan wherein the applicant chooses to pay off his debt with part of his income. Based on factors like income, expense, assets, etc., the repayment tenure can be anything between three years and five years. The tenure cannot go beyond the five years’ cap. In this case too the trustee plays an important role. Debtors pay the trustee who then pays the creditors involved. Again, in case of the debtor’s failure to make the payment, legal proceedings will act upon the trustee’s motion.

As is evident, it is important to hire a bankruptcy lawyer or attorney who possesses the necessary experience and efficiency to handle your case. It is also important that you maintain great transparency with your lawyer. Failing to comply could mean that you are committing strategic bankruptcy or even bankruptcy fraud, both of which can have nervous effects on your bankruptcy case.