Cudahy and Milwaukee Bankruptcy and Tax Law Blog

Huge. Stockton, California Chapter 9 Bankruptcy to Go Forward

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Tue, 02 Apr 2013 17:52:00 +0000

According to an article by the Los Angeles Times the City of Stockton, California is allowed to proceed on the path of their chapter 9 municipal bankruptcy. This is a huge development as municipal bankruptcies are not only rare, but exceedingly hard to pursue.

The battle will be over the treatment of Stockton's pension liability of close to a billion. That's right, close to a billion dollars of unfunded pension liability. Does this sound familiar? Illinois' pension system is also in a mess and its municipalities are going to be hard pressed to avoid Stockton's fate.

My opinion is that Stockton is thinking smart as there is no way that its citizenry can be expected to make up this shortfall by way of higher taxes and austerity measures.

The Law Office of Ben W. Koyl, P.C. offers Bankruptcy Services including Chapter 7 Bankruptcy(Fresh Start) and Chapter 13 Bankruptcy (Bankruptcy Payment Plan); Tax Services including Tax Preparation, Tax Amendments, Offer in Compromise (Tax Settlement), Audit Assistance, and Tax Appeals; Formation of Business Entities (Corporations, LLC, Partnership) Estate Planning (Wills and Trusts) This blog will explore the various areas of law which Paul A. Himsel and Ben W. Koyl focuses on and news surrounding each. For more on these topics or for contact information please visit http://www.cudahybankruptcyattorneys.com.

Dex One Files for Chapter 11 Bankruptcy, Not Really Surprised

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Tue, 02 Apr 2013 17:34:00 +0000

It looks as if Dex One has filed for chapter 11 bankruptcy protection, allowing it to merge with struggling Supermedia, Inc. As stated in the Reuters article, the companies are attempting to merge thereby allowing them to repackage their debt and ultimately to free up cashflow for shareholders.

Well Dex's stock went up after the announcement of this merger, but I believe that this is temporary unless this new company is willing to do things differently.

I can tell you from personal experience as a Dex client that print advertising is nearly dead and online directories like dexone.com etc. are not nearly as efficient or effective as a nice Google search placement. Frankly, if you take those two out Dex can only be an SEO company, and they will need to come down in price. After my contracts are up with them I am done for sure with them.

The Law Office of Ben W. Koyl, P.C. offers Bankruptcy Services including Chapter 7 Bankruptcy(Fresh Start) and Chapter 13 Bankruptcy (Bankruptcy Payment Plan); Tax Services including Tax Preparation, Tax Amendments, Offer in Compromise (Tax Settlement), Audit Assistance, and Tax Appeals; Formation of Business Entities (Corporations, LLC, Partnership) Estate Planning (Wills and Trusts) This blog will explore the various areas of law which Paul A. Himsel and Ben W. Koyl focuses on and news surrounding each. For more on these topics or for contact information please visit http://www.cudahybankruptcyattorneys.com.

San Bernardino in Trouble Again

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Fri, 19 Oct 2012 22:54:00 +0000

Thompson Reuters reports that San Bernardino County is behind on it's post-petition bankruptcy payments. San Bernardino declared for Chapter 9 bankruptcy on July 31, 2012. They have missed their first six bi-weekly "employercontribution payments of more than $1 million to the CaliforniaPublic Employees' Retirement System."

The Debtor and Creditor are making a real effort to work something so it still looks postive.

I'm amazed how many municipal bankruptcy cases are being filed. These pension plans are a huge liability.

Ben W. Koyl

The Law Office of Ben W. Koyl, P.C. offers Bankruptcy Services including Chapter 7 Bankruptcy(Fresh Start) and Chapter 13 Bankruptcy (Bankruptcy Payment Plan); Tax Services including Tax Preparation, Tax Amendments, Offer in Compromise (Tax Settlement), Audit Assistance, and Tax Appeals; Formation of Business Entities (Corporations, LLC, Partnership) Estate Planning (Wills and Trusts) This blog will explore the various areas of law which Paul A. Himsel and Ben W. Koyl focuses on and news surrounding each. For more on these topics or for contact information please visit http://www.cudahybankruptcyattorneys.com.

Philadelphia Orchestra Re-Emerges from Bankruptcy!

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Tue, 18 Sep 2012 20:06:00 +0000

Good new for classical music lovers everywhere! The Philadelphia orchestra re-emerged from bankruptcy last month. Orchestra chairman, Richard Worley, described exiting bankruptcy as“getting out of jail.” Despite these feelings, orchestra chairman felt bankruptcy (Chapter 11) was still the right choice at the time. Worley was grateful for all the individuals who “helped save this wonderful, living, breathing treasure.” The orchestra received a $50 million dollar “gift” which is being moved to an account at Northern Trust.

Loose ends still need to be tied in the month of September. Litigation continues to address $180,000 for 2 concerts that have yet to be paid by a South Korean presenter. Furthermore, “a Sept. 24 hearing will consider some of the 85 claims by creditors being contested by the association”.

Experts believe there are many reasons contributing to the bankruptcies of several orchestras’ around the country, such as Honolulu Symphony and Syracuse Orchestra. One of the major reasons is the decline in interest of classical music among the newer generations. Although classical music has survived the era of jazz, big band, and swing, the cut in music programs throughout the United States is also preventing the younger generation from learning about classical music, thereby contributing to its overall decline.

Experts also believe there is a connection between the bankruptcies of orchestra and the cities to which they belong. Cleveland is a prime example. Once regarded as a “jewel of the Midwest”, Cleveland is now a struggling industrial city. As more and more Cleveland residents have moved away to secure jobs, the city’s orchestra also lost patrons.

http://americancity.org/daily/entry/the-orchestra-and-the-city

The Philadelphia Orchestra should take the Rochester Philharmonic Orchestra as an example of what to do. By adapting to change the Rochester Philharmonic Orchestra was able to recover from bankruptcy. Reinvention will be key.

The Law Office of Ben W. Koyl, P.C. offers Bankruptcy Services including Chapter 7 Bankruptcy(Fresh Start) and Chapter 13 Bankruptcy (Bankruptcy Payment Plan); Tax Services including Tax Preparation, Tax Amendments, Offer in Compromise (Tax Settlement), Audit Assistance, and Tax Appeals; Formation of Business Entities (Corporations, LLC, Partnership) Estate Planning (Wills and Trusts) This blog will explore the various areas of law which Paul A. Himsel and Ben W. Koyl focuses on and news surrounding each. For more on these topics or for contact information please visit http://www.cudahybankruptcyattorneys.com.

Bankruptcy & Chapter 7

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Tue, 14 Aug 2012 01:48:00 +0000

Is it better to lose one’s home to bankruptcy, or is it better to serve a life sentence of overtime, 2^nd jobs, and twice as much debt for a home? A house worth $100,000 can easily cost an individual $200,000 through reaffirmation, where individuals agree to pay the debt under a new agreement with the bank.

Chapter 7, also known as, “a fresh start” provides people with just that: a fresh start.

When Robert and Betsy first agreed to declare bankruptcy, they were heart broken. While employed they had worked very hard to maintain a home. They shared many fond memories in that house and were not willing to give it up.

A few months following bankruptcy, they realized the important things they shared were still with them. They had one another, their children, and they still had their fond memories. More importantly, they didn’t have the stress of having to “save” their home, by countless additional hours of work. They didn’t have the stress of how they would find a 2^nd or 3^rd job to pay off the obscene new agreement they would have had to sign. Things hadn’t worked out the way the planned, but they forgave themselves for whatever misfortune they found, but now they were living life anew.

Some lawyers believe only a third of individuals seeking bankruptcy will choose Chapter 7.

Aside from mortgage debt, the 2^nd biggest debt comes from student loans, which currently cannot be declared in bankruptcy. This is unfortunate for those individuals who are burdened with a loan of $100,000 but only earn a salary of $30,000. For those individuals who already have a home, this can be considered a 2^nd mortgage.

Bankruptcy and Student Loans

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Sat, 28 Jul 2012 17:18:00 +0000

The government is in the process of allowing college grads to file bankruptcy for student loans for those individuals who make an attempt over a 5-7 year period to pay back the loans. However, it only applies to private loans.

It turns out that companies such as Sallie Mae are not necessarily opposed to student loan bankruptcy. How is that, you say? Simple business sense. It has to make sense for their business. So, here’s how it works.

Currently Sallie Mae earns interest plus principle on portfolios, since they are federally guaranteed. If a borrower is delinquent, but later makes payments, Sallie Mae makes a little extra on the late payments. So that’s, interest plus principle plus late fees. However, over the course of a year, before the borrower is officially transferred over to the government for delinquency, Sallie Mae has to contact the borrower several times. Contacting borrowers means “servicing costs”. If, on the other hand, the accounts were paid on time, Sallie Mae would “trade late fees for delinquent costs”, which, in the long run, is more profitable.

While we wait on a final decision on student loan bankruptcy, it is important to look at the things we do have control over, and the things that can be filed for bankruptcy.

Keep in mind that in a 1934 decision, the Supreme Court had the following to say about bankruptcy: “[It] gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.”

Bankruptcy is for the “honest but unfortunate debtor,” and under Chapter 7, Chapter 11, & Chapter 13 codes, bankruptcy can be filed for several reasons, including: credit card debt, property, and business-related debt. Under Chapter 13, individuals also have the option for repayment over 3-5 year installment plans.

Even Cities Go Bankrupt

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Thu, 19 Jul 2012 01:53:00 +0000

Of course, they are doing it for different reasons. Over-spending the cities’ budget and falsifying information are some of them, unfortunately. But in the case of San Bernadino, the rising costs of pensions are supposedly one of the reasons.

As long as you aren’t scheming to falsify information, but are, nevertheless, drowning in debt, bankruptcy may still be the best option for you. Why wait? Some experts believe that waiting to declare bankruptcy when there is only a slight chance to pay off debts can make a situation worse. And those of you who hesitate, the honest ones, are primarily concerned about how the rest of the world will view you. The fact of the matter is, life goes on after bankruptcy. There is no written rule that says you will not be successful in the coming years following bankruptcy. Times are tough for the majority of Americans (as it is for the Spanish, Greek, etc). So if bankruptcy is indeed inevitable, do yourself a favor: stop feeling guilty, forgive yourself, and move on.

Bankruptcy is a Business Decision

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Tue, 07 Feb 2012 17:29:00 +0000

Many people feel ashamed or embarrassed when they think about filling for bankruptcy or after they have done so. The fact is that there is no reason to be embarrassed. Just know that while most people don’t talk about their financial status, many of those same people you don’t want finding out about your financial troubles are facing the exact same issues as you are. Bankruptcy is not limited to any group of people or any amount of income. It’s not just the person next door or the less well-off people of this country filing for bankruptcy. The fact is that many of the country’s most influential and wealthy figures have at one time or another filed for bankruptcy.

Hereare just a few of the people who have filed for Bankruptcy at one point in their lives: Michael Jackson, Elton John, Walt Disney, Stan Lee, PT Barnum, and Donald Trump. This small list of very successful people illustrates the fact that Bankruptcy does not prevent you from becoming a successful, contributing member of society. Instead, it shows that Bankruptcy is used by even the very wealthy and successful as a tool to deal with debts in a smart, business savvy manner..

Many major American companies have also filed for Bankruptcy in addition to many famous and influential people. Hostess Brands Inc, a wholesale baker and creator of the Twinkie has now filed twice for Bankruptcy. American Airlines, the third largest airline in the country, has also filed for Bankruptcy. The list of companies who have filed for bankruptcy, much like the list of famous and successful people, is long and extensive.

The reason I am telling you this is to encourage you to not worry about any embarrassment. If you are having financial troubles it is important to seek help from an experienced Bankruptcy attorney and not ignore or hide your issues. Know that you are not alone. Thousands of Americans file for some type of Bankruptcy every year. Understand that it is nothing to be ashamed of and should instead be viewed as something to be proud of. You are taking responsibility for your debts, dealing with your issues, and helping out yourself as well as those around you. There could be nothing worse than ignoring the problems you are facing until there is nothing that can be done about it.

Just know that Bankruptcy is not the end. Think of it as a new beginning, a fresh start. You CAN recover from this and become very successful in your life. Just look at all of the large companies and wealthy and successful people who have utilized Bankruptcy to their advantages and have continued a successful and prosperous existence.

In Brief, What Bankruptcy Can and Cannot Do

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Thu, 02 Feb 2012 00:47:00 +0000

For whatever reason you are filing for Bankruptcy it is important to know which debts will be eliminated and which debts will remain. That’s why it is important to seek the services of an experienced Bankruptcy attorney to aid in your choice on which Chapter to file.

Which debts Chapter 7 and Chapter 13 can and cannot help with.

Bankruptcy Can:

Wipe out unsecured debts, debts which the creditor does not have a lien on any of your property and cannot repossess any items if you fail to pay the debt. Unsecured debt, like credit card debt, is exactly the type of debt Bankruptcy is designed to eliminate. However, Chapter 13 and Chapter 7 deal with the discharge of unsecured debts differently. When you file for Chapter 13 they may have to pay a portion of their unsecured debts through their payment plan. After successful completion of their payment plan the remaining unsecured debt will be eliminated.

Bankruptcy Can't:

Prevent a secured creditor from repossessing property. If you have a secured debt, a debt where the creditor has a lien on your property and can repossess it if you don't pay the debt, bankruptcy can eliminate the debt, but it does not prevent the creditor from repossessing the property unless you invoke certain procedures during the bankruptcy case.

Eliminate child support and alimony obligations. Child support and alimony obligations survive Bankruptcy.

Wipe out student loans. Student loans cannot be discharged through bankruptcy unless you can show that repaying the loan would cause "undue hardship.” The you must show not only that you cannot afford to pay the loans now, but also that you have very little likelihood of being able to pay them in the future.

Eliminate most tax debts. Eliminating tax debt in bankruptcy is not easy, but it is sometimes possible for older debts for unpaid income taxes. There are many requirements to be met, however.

Eliminate other non-dischargeable debts. The following debts are not dischargeable under either Chapter 7 or Chapter 13 bankruptcy:

-Debts not listed on your bankruptcy papers, unless the creditor learns of your Bankruptcy case

-Debts for personal injury or death caused by your intoxicated driving, and

-Fines and penalties imposed for violating the law, such as traffic tickets and criminal restitution.

If you file for Chapter 7, debts which cannot be discharged in Bankruptcy will remain when the case is over. If you file for Chapter 13, these debts will have to be paid in full during your repayment plan. If they are not repaid in full, the balance will remain at the end of the case.

There are some situations in which the judge may decide dischargeable debts should survive the Bankruptcy. These include debts incurred through fraud, such as lying on a credit application or passing off borrowed property as your own to use as collateral for a loan.

What Only Chapter 13 Bankruptcy Can Do:

Stop a mortgage foreclosure. Filing for Chapter 13 bankruptcy will stop a foreclosure and force the lender to accept a plan where you make up the missed payments over time while staying current on your regular monthly payments. To make this plan work, you must be able to demonstrate that you will have enough income in the future to support such a repayment plan.

Allow you to keep nonexempt property. You don't have to give up any property in Chapter 13 because you use your income to fund your repayment plan.

"Cram down" secured debts that are worth more than the property that secures them. You can sometimes use Chapter 13 to reduce a debt to the replacement value of the property securing it, then pay off that debt through your plan.

Twelve Reasons to File Bankruptcy Part II of II

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Thu, 26 Jan 2012 21:55:00 +0000

Part II of Twelve common reasons people file for Bankruptcy.

6. Stop Harassing Phone Calls From Creditors
Some creditors try to harass debtors or try and intimidate them until they pay their debts. Many times creditors will relentlessly call you at home or at your job to try to get you to pay your debt. A Bankruptcy filing will immediately stop your creditors, and stop their harassing phone calls and other collection actions. Creditors may only contact the attorney representing the debtor and there may be a claim against that creditor if they do contact the debtor themselves after the filing of a Bankruptcy.

7. Restore or Prevent Your Utilities From Being Shut Off.

If your home is in risk of foreclosure then your utilities such as electric and heat may also be in risk of being terminated. Filing bankruptcy can prevent the utility company from leaving you in the dark and without heat.

8. Provide Help For Massive Amounts Of Student Loan Debt.
Even though student debt will not be eliminated in most cases, Bankruptcy can consolidate your student loan debt into a payment plan. This consolidation will allow a debtor to make monthly payments through a Chapter 13 plan, that is within the financial ability of the debtor.

9. Stop a Wage Garnishment.

A Chapter 7 case will immediately stop a wage garnishment. A wage garnishment basically takes away 10% of your weekly paycheck. After the wage garnishment eats up your paycheck, then you most likely will not have enough of your paycheck left to pay your rent, buy food, and support your kids. By filing for a Chapter 7 you will once again be able to support yourself and your family.

10. Challenge Certain Claims of Fraudulent Creditors or Padded Debts.

A bankruptcy will allow you to challenge these claims from creditors who are trying to collect more money from you than you really owe. Many creditors charge you so much interest, late fees, and attorney fees that they try to collect twice as much from you as you borrowed.

11. You are recovering from a bad divorce.

Divorce is a major reason why many people file for bankruptcy. Child support and alimony payments can take away most or all of a spouse’s income, leaving them with no way to support themselves.

12. You are trying to deal with a lawsuit that has been filed against you.

Many people file Bankruptcy to stop a lawsuit that has been filed against them. Bankruptcy stops any litigation that has been filed against you. Bankruptcy stops credit card lawsuits, car accident cases, and any other small business related lawsuits.

http://ezinearticles.com/?Top-Ten-Reasons-People-File-for-Bankruptcy&id=15274

http://newjerseybankruptcycenter.com/wordpress/2009/01/05/top-twelve-reasons-people-file-for-bankruptcy/

12 Reasons to File for Bankruptcy, Part 1 of 2

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Thu, 19 Jan 2012 22:42:00 +0000

Once a person is educated on what Bankruptcy is and what it can do, the next thing they must decide is whether they have a valid reason to file for bankruptcy in which it will help them. Although Bankruptcy is a beneficial tool people must remember that it does have some negative repercussions that must be contemplated. Bankruptcy can affect credit, may create issues with keeping bank accounts and credit cards, can cause the loss of valuable possessions, and makes it difficult to get on with necessities of life such as buying or renting a home or car, getting insurance or finding a job. Financial advisors may view bankruptcy as a desperate last resort that should only be carried out with the counsel of an experienced bankruptcy attorney like myself, and only when budgeting, credit counseling or other efforts have failed.

Why do people file for Bankruptcy?

There are many reasons why people may find it beneficial, if not necessary, to file for Bankruptcy. Here is a list of twelve common reasons:

1. Eliminate the Legal Obligation to Pay Most of Your Debts.

As was discussed in a prior blog, the goal of bankruptcy is to discharge debt and give the debtor a fresh start. This can be done through Chapter 7, liquidation, or Chapter 13, reorganization.

2. Stop the Foreclosure on Your House and Allow You to Effectively Make Payments to Catch up on Missed Payments of Your Mortgage.

If your home is in a foreclosure, then a Chapter 13 will stop it if is filed before the sheriff’s sale. However, a bankruptcy does not eliminate your mortgages that are filed on your home. A Bankruptcy will structure a repayment plan to enable you to repay the amount that you are behind on your mortgage over a three to five year period.

3. Prevent Your Car or Other Property From Being Repossessed.

Bankruptcy can save property such as a car from being sold even if it has already been repossessed. However, your bankruptcy must be filed before the car or other property is sold at the auction. Again, money owed will be consolidated into your Chapter 13 plan. After you file, you will no longer pay the bank or the finance company, instead you will make your monthly payments to the bankruptcy trustee who in turn will pay the finance company your missed payments over a three to five year period.

4. Reduce or Even Wipe Out High Medical Bills.

A Chapter 7 Bankruptcy can wipe out your outrageous medical bills that simply won’t go away.

5. Recent Loss of a Job.
Many people fall behind in bills and seek to file bankruptcy due to the loss of a job or some means of income. Many times the loss of a job is combined with the fact the debtor is also incurring high medical bills. The loss of employment is also intertwined with a family also incurring high medical bills.

If any of the first five reasons to file Bankruptcy fit your situation please contact Ben W. Koyl at Our Website. Check in to our next blog for seven more common reasons people file for bankruptcy.

The Law Office of Ben W. Koyl, P.C. offers Bankruptcy Services including Chapter 7 Bankruptcy(Fresh Start) and Chapter 13 Bankruptcy (Bankruptcy Payment Plan); Tax Services including Tax Preparation, Tax Amendments, Offer in Compromise (Tax Settlement), Audit Assistance, and Tax Appeals; Formation of Business Entities (Corporations, LLC, Partnership) Estate Planning (Wills and Trusts) This blog will explore the various areas of law which Paul A. Himsel and Ben W. Koyl focuses on and news surrounding each. For more on these topics or for contact information please visit http://www.cudahybankruptcyattorneys.com.

Resource #1

Resource #2

Chapter 7 and Chapter 13, The Basics

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Mon, 16 Jan 2012 21:20:00 +0000

Chapter 7 may be filed by an individual or a business and is considered liquidation because some or all of the debtor’s property may be sold (liquidated) in order to pay off some of their debt. However, in Florida and other states, some property, known as exempt property, is protected and cannot be sold in order to pay money owed by the debtor. In return for filing Chapter 7 some or all of the debtor’s unsecured debts (debt with no collateral attached) will be discharged. Secured debts on the other hand are usually not dischargeable in Chapter 7 Bankruptcy. There are several choices of what to do for money owed on a secured debt. The debtor can either allow that property to be repossessed by the creditor, to continue payments on that property by reaffirming that debt, or redeem the property by paying the creditor a sum equal to the replacement value of that property.

Not everyone is entitled to file for Chapter 7 Bankruptcy because certain criteria must be met. The debtor’s income cannot be over a certain amount, and if it is, the debtor must pass what is known as "means test." Additionally, the court may dismiss the bankruptcy action if the debtor has filed a previous bankruptcy within a certain period of time or if the court believes the debtor is attempting to cheat their creditors.

Chapter 13 Bankruptcy

Chapter 13 is a type of bankruptcy referred to as reorganization because the debtor keeps all of their property but their debts are reorganized so that they may make monthly payments over of a time period of usually three to five years. Many times Chapter 13 is favored over Chapter 7 because it allows the debtor to save their homes from foreclosure by providing the option for the debtor to make up for those payments in their repayment plan. In order to file Chapter 13 Bankruptcy the debtor must have a reliable source of income that can be used to repay debts over a period of three to five years. The payments are determined by how much the debtor earns, how much is owed, and how much unsecured debt may have been paid.

The Law Office of Ben W. Koyl, P.C. offers Bankruptcy Services including Chapter 7 Bankruptcy(Fresh Start) and Chapter 13 Bankruptcy (Bankruptcy Payment Plan); Tax Services including Tax Preparation, Tax Amendments, Offer in Compromise (Tax Settlement), Audit Assistance, and Tax Appeals; Formation of Business Entities (Corporations, LLC, Partnership) Estate Planning (Wills and Trusts) This blog will explore the various areas of law which Paul A. Himsel and Ben W. Koyl focuses on and news surrounding each. For more on these topics or for contact information please visit http://www.cudahybankruptcyattorneys.com.

Insolvency Can Happen to Anyone and Bankruptcy Can Help

noreply@blogger.com (Paul A. Himsel and Ben W. Koyl) — Thu, 12 Jan 2012 17:28:00 +0000

The very word often brings an almost dirty connotation to the minds of many people. People with little knowledge on the topic of bankruptcy often have misplaced or incorrect feelings and beliefs on what bankruptcy is and what it actually does. Before researching and learning about bankruptcy I was one of those people who had misplaced beliefs. I thought of bankruptcy as if it were in the game Monopoly. I believed it was just something that happened to someone when they lost all of their money, were poor, and were not productive members of society. I could not have been more wrong. Not only have I learned that there are many types of bankruptcy, but I have learned that it affects people of all walks of life and financial status.

So what does bankruptcy basically do?

One of the most important things about bankruptcy many people do not know is that it can be an effective tool to discharge one’s debt and protect assets such as real property. Bankruptcy allows people in over their heads to improve their financial condition by either discharging unsecured debts or through the creation of a payment plan which suits the individual debtor’s ability to pay while still being able to live.

There are several types of bankruptcies used for various situations.

“Chapter 7 Bankruptcy involves the liquidation of an individual or business’s assets and is the simplest and fastest version available. Chapter 9 Bankruptcy is known as municipal bankruptcy used to resolve municipal debt. Chapter 11 Bankruptcy is known as reorganization or rehabilitation bankruptcy primarily used by business debtors which liquidate some functions and assets while a business continues to maintain their day to day operations relatively undisturbed. Chapter 12 Bankruptcy is rare and is used for rehabilitation of fishermen or farmers that have lost a portion of their capital due to bad catch or harvest, among other reasons.Chapter 13 Bankruptcy is a rehabilitation bankruptcy that comes with a payment plan for individuals with a regular source of revenue or know someone that is willing to pay the creditors in installments while a person’s finances is being restored. Chapter 15 Bankruptcy is known as ancillary bankruptcy and is used primarily in international situations to enable foreign investors and debtors to clear debts that they cannot pay and cannot be held liable in the issuing country.”